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Un hombre pasa junto a un Logo de LG durante el MWC de Barcelona en 2018. Reuters

The South Korean giant LG has announced today that it will split five subsidiaries of the group, present in sectors less strategic for its business, and that it will group them in a new company that will go public. The spin-off, which will take place next year, is part of a battery of organizational changes that the company, South Korea’s fourth-largest holding company, will implement to “respond to the current economic business environment.”

LG will bring together under the new company all the subsidiaries in which it participates but does not have majority control. Thus, it will include the 24.7% it holds in LG International, which specializes in energy, raw materials and the sale of materials and which in turn has 51% of the logistics company Pantos. In addition, the participation of 33.1% in the semiconductor manufacturer Silicon Works, 33.5% in the company of materials for interiors of homes and automobiles LG Hausys and 50% that it has in LG MMA, the joint venture chemistry he created in 1991 together with the Japanese Sumitomo, according to Europa Press.

The bulk of LG’s business will remain under the umbrella of LG Corporation, the current parent company. Thus, after the spin-off, current LG shareholders will retain 0.9115879 shares of the company for each one they currently have and will receive 0.0884121 shares of the independent company for each share in their possession.

The company will call a shareholders’ meeting on March 26 to approve the changes and on May 1 the separation of both companies will be formalized. At the end of that month, the spun-off company is expected to start trading.

LG has indicated that this separation will allow it to focus on current core businesses such as electronics, chemicals and telecommunications, thus increasing the value offered to its shareholders. Among the products LG manufactures today are batteries and screens used by large companies such as Apple, General Motors and Tesla.

The current LG holding company will have assets of 9.8 trillion won (about 7.436,5 million), while the new company they want to create will have assets of 900 billion won, according to Reuters.

Among the organizational changes, the company has also announced the creation of a new multifunctional quality center, the inauguration of an innovation center in North America, will reinforce R&D within each business unit and will incorporate the robotics business division in your B2B unit. LG has explained that the ultimate goal is to promote “more disruptive” solutions and create new opportunities to strengthen its competitiveness. The Korean multinational will also launch a customer experience laboratory, CX Lab, “to be able to respond more quickly to the changing needs” of consumers.

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