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LG adviser Koo Bon-jun’s LX Holdings will be officially launched in May. The plan to separate the LG Group affiliates under LX Holdings by separating four subsidiaries, including LG International, was finalized at the LG Shareholders’ Meeting. As LG, which focuses on electronics, telecommunications, and chemistry, and LX, which focuses on semiconductors, logistics, and trading companies, focus on their respective areas, it is predicted that business competitiveness will increase as well.
Passed the corporate spin-off with an’overwhelming approval rate’
On the 26th, LG held a regular shareholders’ meeting at LG Twin Tower in Yeouido, Seoul, and passed a split plan to establish a new holding company, LX Holdings, by separating four subsidiaries, including LG International, LG Hausys, Silicon Works, and LG MMA. The LG Group will be reorganized into LG, a holding company, and LX Holdings, a new holding company. The official launch date of LX Holdings is May 1.
The spin-off is a special resolution of the shareholders’ meeting. At least one-third of the total stocks and two-thirds of the shareholders participating in the shareholders’ meeting must approve to pass. On this day, the shareholders’ total attendance rate was 89.2%. Of these, 76.6% agreed to the agenda for the division of the holding company. ISS, the world’s No. 1 voting rights advisor, expressed opposition to the split plan and some foreign investors opposed it, but shareholders gave the hands of the current management.
LG International to actively invest in nickel mines
LX Holdings plans to maximize corporate value by intensively fostering affiliates with growth potential. Core affiliates are LG International and LG Hausys. Meanwhile, the two companies have been relatively undervalued within the LG Group.
LG International plans to expand its business areas to eco-friendly and healthcare. The company is also pursuing a work to remove the’supervisor’ and change it to LX Global. LG International is pushing ahead with investments in Indonesia’s mines as its No. 1 priority project this year to mine nickel, a key material for electric vehicle batteries. LGI has been operating coal mines and farm farms in Indonesia since the mid-2000s. The local network is also strong. It plans to make large-scale investments with LG Energy Solutions, which produces batteries for electric vehicles. It plans to continue to expand its logistics business through its subsidiary Pantos.
LG Hausys plans to reorganize its low-margin automobile business and focus its capabilities on high value-added building materials such as interiors. In the automobile business, Hyundai BNG Steel, a subsidiary of the Hyundai Motor Group, is selected as the preferred negotiator and is being sold. In addition, Silicon Works, a fabless (semiconductor design company) subsidiary, is expanding its main product DDI (display drive chip) supplier.
Focusing on’visible performance’ in batteries, etc.
LG put particular emphasis on qualitative growth and securing competitiveness in growth businesses at the shareholders’ meeting on this day. In existing businesses such as electronics, chemicals, and telecommunications, it has decided to increase its competitiveness through innovation such as digital transformation (DX). It is planning to focus on making visible results in growth business areas such as batteries, large OLEDs (organic light-emitting diodes), and automotive electronics (electronic devices).
Chairman Kwang-mo Koo said in a greeting, “Last year, LG has upgraded its business portfolio in the direction of reorganizing non-core businesses according to the selection and concentration strategy and strengthening the competitiveness of its main business and growth business.” We will focus on growth and secure core competitiveness in the growth business early to visualize our performance.”
It also revealed a willingness to strengthen ESG (environmental, social, and governance) management. The 13 listed companies of the LG Group will soon hold the board of directors and establish the ESG committee and the internal transaction committee within the board of directors. In addition, the authority and independence of the Audit Committee and the role of the Outside Director Candidate Recommendation Committee will be strengthened. Chairman Koo emphasized, “I will try to become a sustainable LG through the establishment of the ESG management system.”
Reporter Hwang Jung-soo/Kang Kyung-min [email protected]