Final Blue Print for Top 5 Chaebol"s Restructuring

The basic blue print for the five largest chaebol's restructuring has been drawn up.
The business sector, including the five major chaebols, and the government agreed, on December 7 at Chong Wa Dae (the Blue House), that they will restructure the top five by dividing their subsidiaries into small groups and focus only on three to five main industries.
The top five chaebol will either have to sell, liquidate or merge their non-essential or marginal subsidiaries irrespective of their profitability and will diminish the number of subsidiaries from the current 264 to roughly 130 by late next year.
Industry analysts are saying that they will have to shed a large portion of their subsidiaries and companies to raise 20 trillion won by selling their non-essential businesses and repay their debts to financial institutions.
In the meeting, which President Kim Dae Jung presided over, both sides agreed that the chaebols will center on three to five main industries each.
Main industries by groups are as follows:
Samsung will reduce the number of subsidiaries from the current 66 to roughly 40 and will have as their main industries: electronics, finance, trade and and a rather broad catchall category-services.
Hyundai will focus on cars, construction, electronics, heavy chemical and finance and services, diminishing the number of subsidiaries from 63 to approximately 30.
Daewoo will center on cars, heavy industry, trade, finance and services, shrinking from 41 to as few as 10 companies.
LG will focus on chemistry, energy, electronics, telecommunications and finance, and reduce its numbers of companies to 30 from a current 53.
SK will maintain its energy, chemicals, information, telecommunication and finance industries, and trim its number of companies from 42 to around 20.
Based on this blue print, the Korean business landscape should be dramatically altered.
For example, Samsung and Daewoo groups agreed to exchange Samsung's auto production for Daewoo's electronics division, allowing Samsung to fortify its electronics business and while Daewoo enlarges its car making empire.
Some analysts believe the agreement will essentially bring about a substantial reduction of the chaebols' power and influence: the very forces that shaped the modern Korean economy.
The long sought-after agreement, which the government has strongly pressed for since the IMF bailout late last year, that outlines the basic plans for companies' restructuring is finally completed.
Through this action Korea's economy is expected to recover the confidence of foreign investors.