LG International Corp., the trading arm of South Korea’s fourth largest conglomerate LG, would go under the group’s holding company to expand its revenue base and comply with tougher antitrust regulations.
LG Corp. in a board meeting on Thursday decided to purchase 9,571,336 shares in LG International, tantamount to a 24.7 percent stake from owner family members and others, for 296.7 billion won ($265.4 million) based on the Thursday closing price of 31,000 won per share, making it a subsidiary with more than a 20 percent stake.
LG Group was the first conglomerate in Korea to shift to a holding structure in 2003, prompting similar moves from family-owned chaebols notorious for controlling management with small stakes through complex cross-shareholdings among affiliates.
LG International expects the move will improve transparency and help the company expand its overseas resources development and infrastructure businesses.
The owner family’s combined 12 percent stake in LG International would all be sold to the holding company, including 3.01 percent from LG Group Vice Chairman Koo Bon-joon, 2.51 percent from Chairman Koo Bon-moo and 2.11 percent from Vice President Koo Kwang-mo.
LG Corp. owns 33.7 percent of LG Electronics, 33 percent of LG Chem, 36.1 percent of LG Uplus, 34 percent of LG Household & Health Care and 33.5 percent of LG Hausys.
Shares of LG Corp. finished Friday up 1.37 percent at 88,900 won while those of LG International fell 5.16 percent at 29,400 won.
By Hwang Hyung-gyu and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]