LG Corporation has announced that it will spinout some of the affiliates to a new holding company next year. The decision regarding restructuring the company comes at a time when conglomerates are growing in size. And are reaching the transitional period of a new generation of leaders.
As reported by Reuters, according to the regulatory filings, the affiliates will be spun-off in May 2021. The existing holding firm of the affiliates is LG Corp and it will reportedly hold assets worth 9.8 trillion won($8.85 billion). However, the new holding firm will have assets worth 900 billion won. Following are the companies that will spinout from LG Corp.
- LG International Corp
- LG Hausys Ltd
- Silicon Works Co Ltd
- LG MMA Corp.
- unlisted Pantos Logistics Co Ltd
Currently, affiliates of LG Corp. involve in a lot of business including batteries & displays in automobiles, household products, cosmetics. Some of its clients include General Motors, Tesla, and Apple. With this restructuring, LG Corp. hopes to concentrate more on its core-business: consumer electronics, chemicals, telecommunication & services.
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Koo Bon-Joon is likely to head the new holding company. He is one of the LG Founder’s sons and a nephew of Koo Kwang-mo who is currently the chairman of LG Group. Talking about the group, LG Corp. is the fourth-largest “Chaebol” in South Korea. For the unware, Chaebol is an industrial conglomerate that is run and controlled by an owner or family in South Korea.
LG was founded in 1947 by Koo In-Hwoi. Accordingly, he first started Lucky Chemical(now: LG Chem) and it just expanded into a big conglomerate. However, on the verge of a new century, it broke up into several conglomerates. That said, the current development is another round of restructuring where the company sees the third generation of family leaders(Grand Children of Founder).
