BlackRock Inc., the world’s largest fund operator with $6 trillion assets under its management, and related units purchased a combined 5.04 percent equity interest in South Korea’s LG Electronics this month.
The U.S. asset manager and 13 affiliates acquired a 4.97 percent stake in LG Electronics on May 2 and additional 0.07 percent on May 7 to hold a total of 8,243,170 shares. The holdings were worth 805.3 billion ($755.4 million) at the stock’s Friday closing price of 97,700 won, according to the Financial Supervisory Service on Sunday.
Under the Korean law, any purchase in a company’s equity of 5 percent or more is subject to disclosure, including the purpose of acquisition, within the first five days.
Shares of LG Electronics closed Monday down 0.2 percent at 97,500 won.
The New York-based fund with operation across 30 countries said the purchase was made for “pure investment.”
The investment comes after LG Electronics made its largest-ever $1.2 billion acquisition of automotive lights maker ZKW to strengthen its automotive electronics business which is pivotal in future mobility.
LG Electronics is enjoying a white goods heyday with its premium appliances. It delivered its second best-ever operating profit of 1.11 trillion won in the first quarter, surpassing the 1 trillion won mark in almost nine years, as its renewed focus on premium TV and home appliances offset losses from the smartphone business. Sales reached 15.1 trillion won, the fourth highest quarterly record.
Eased geopolitical risks also raised the global fund’s interest in Korean equities and the ongoing trade war between the United States and China could work in LG’s favor, analysts said.
Last month, U.S. President Donald Trump banned Chinese electronics maker ZTE from using American-made components for seven years, saying the company failed to punish employees who violated U.S. trade sanctions against Iran and North Korea. ZTE’s loss could be LG’s gain. As of last year, ZTE was the world’s fourth largest supplier in the North American smartphone market and a major competitor to No. 3 LG Electronics.
By Lee Jae-cheol and Kim Hyo-jin
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