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LG will spin off five non-core businesses into a separate holding company next year
LG Corp has announced its decision to spin off five subsidiaries next year into a new holding company, the final step in the reorganization of one of South Korea’s largest chaebols (family conglomerate).
REUTERS / Sergio Perez
Analysts expect the new holding company, which will be led by Bon-Joon Koo, the son of LG’s founder, will eventually be spun off from LG Corp. LG Corp itself is headed by Koo Kwang-mo, the nephew of Bong-Joon Ku, who took over as chairman of the LG Group in 20221 after his father’s death.
Around the turn of the century, LG Group and other South Korean conglomerates split into several companies headed by the children of their founders. Conglomerates are now being taken over by the grandchildren of these founders, leading to new company restructurings.
LG Corp said the spin-off of subsidiaries would allow it to focus on existing core businesses such as electronics, chemicals, and telecommunications services.
According to the documents submitted to the regulatory authorities, the companies that will be spun off in May 2021 into a separate holding structure include the trading company LG International Corp, the manufacturer of interior parts for homes and cars LG Hausys Ltd, the manufacturer of display chips Silicon Works Co Ltd and the manufacturer chemicals LG MMA Corp, which is not listed on the stock exchange.
The new holding company is expected to be listed at the end of May 2021, and its assets will amount to 900 billion won ($ 812.5 million).