SEOUL, Nov. 16 (Korea Bizwire) — LG Group is likely to spin off multiple affiliates, people familiar with the matter said Monday, with an uncle of the conglomerate’s chief taking the leadership of the spun-off companies.
Koo Bon-joon, an uncle of current LG Group Chairman Koo Kwang-mo and a younger brother of late LG Group chief Koo Bon-moo, is expected to take control of multiple LG affiliates, including LG International Corp., LG Hausys Ltd., and Pantos Co., which are expected to be spun off from the country’s fourth-largest conglomerate, the sources said.
LG Group is reportedly planning to hold a board meeting later this month to determine a spin-off plan that allows Bon-joon to establish his own business group.
LG Group has a tradition in which the eldest son of the group chief inherits the management power of the conglomerate, while brothers of the chief create their own business groups with spin-off companies after the group leader’s death.
Conglomerates like LS Group, LIG Group and Heesung Group were all founded under LG’s management tradition.
Speculation over another LG Group spin-off has been rising after Bon-moo died in 2018.
Industry insiders expect that Bon-joon will use his 7.72 percent stake in LG Corp. worth 1 trillion won (US$900 million) to acquire LG International and LG Hausys.
LG Corp., the holding company of LG Group, currently holds a 25 percent stake in LG International, a trading affiliate of the group, and a 34 percent stake in LG Hausys, a major construction material maker.
LG International, meanwhile, holds a 51 percent stake in Pantos, which covers the group’s overseas logistics business.
Industry observers speculate that Bon-joon may also take over Silicon Works Co., LG’s fabless chip design unit, and LG MMA Corp., a chemical material producer, to create a large business group.
Such a spin-off plan would make LG Group focus more on its main businesses, like electronics, chemicals, household care and telecom.