LG may spin off affiliates for chairman's uncle

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, LG Hausys, and Pantos, 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 Corporation worth 1 trillion won ($900 million) to acquire LG International and LG Hausys.

LG Corporation, 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, LG's fabless chip design unit, and LG MMA, a chemical material producer, to create a large business group.

Such a spin-off plan would allow LG Group to focus on its main businesses, like electronics, chemicals, household care and telecom.

Yonhap