Market Insight LG Electronics’ MC division sales speed? Leave it to Kim & Chang for legal advice

LG Electronics entrusted legal advice for the division and sale of the MC (mobile communication) division in charge of smartphones to the Kim & Chang Law Office. Interest is focused on whether the speed of the sale of the MC division will increase.

According to the M&A industry on the 22nd, it is known that LG Electronics recently appointed Kim & Chang as legal advisor to comprehensively review plans for the sale after the division of the MC division. EY Hanyoung Accounting Firm entrusted accounting and due diligence advice. It is reported that after the division of the business headquarters, Kim & Chang and other advisors began to review the transfer of the business, the sale of shares in the division, and the sale of intellectual property rights (IP).

In the industry, it is expected that LG Electronics will’split the sale’ rather than sell the MC division in total. It is observed that it will attempt to sell it, leaving only key functions such as R&D of advanced smartphone technology. Earlier, LG Electronics President Kwon Bong-seok revealed to the executives and staffs through an in-house message that “We are carefully reviewing the direction of business operation with all possibilities open now.” An official from the M&A industry explained, “It is quite unusual to formalize a full review of the business even before the deal is concluded.”

However, the outlook is that it will not be easy to find the original seller. LG Electronics’ mobile business was once recognized as one of the top five in the global market, but the accumulated deficit alone reached 5 trillion won. The value of the MC division evaluated by the industry also varies considerably from 500 billion won to several trillion won.

It is known that overseas original buyers are more certain to take over. The major targets are the latecomers who want to expand the global market, such as the North American business. Vietnam’s Vingroup and Chinese companies are prominently discussed. In the securities industry, U.S. information technology (IT) companies such as Google and Facebook, which have in mind the Internet of Things (IoT) business that connect smart devices, are also cited as candidates for the original seller.

Some say that LG Electronics elected a legal advisor first, and it is also interpreted as a paving stone for emergency situations such as restructuring in the future. The rumors of LG Electronics’ withdrawal from the smartphone business began to spread rapidly from the second half of last year as in-house executives and employees were shaken due to a large-scale workforce reduction. It is also interpreted as taking this into account that President Kwon emphasized through an in-house message, “No matter how the direction of business operation is determined, in principle, employment is maintained, so there is no need to be anxious.”

Reporter Kim Rian [email protected]

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