LG Corporation shareholders approve spin-off plan
Shareholders of LG Corporation, the holding firm of LG, approved the company's plan to spin-off multiple affiliates into a new entity on Friday, countering a challenge by a U.S. hedge fund opposing the plan.
LG said 76.6 percent of shareholders, who attended their annual meeting in Seoul, supported the creation of a new holding firm tentatively named LX Holdings. The agenda needed approval from two-thirds of shareholders in attendance.
LX Holdings, which will be launched on May 1, will have LG International, LG Hausys, LG MMA and Silicon Works under its umbrella. It is expected to officially split from LG Group later this year.
The outcome deviates from opposition by Whitebox about business synergy. Whitebox holds around 1 percent of LG Corp’s shares.
LG, however, said the separation will help it focus on its main businesses - electronics, chemicals and telecom services - while beefing up its future growth engines, such as automotive, batteries and large OLEDs.
In November, LG decided to separate some affiliates for 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.
LG 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.
Local conglomerates, like LS Group, LIG Group and Heesung Group, were all founded under LG's management tradition.
Meanwhile, LG has been seeking ways to solve the corporate brand issue with Korea Land and Geospatial Informatix, which uses LX in its English name.
The state-run organization said it plans to take legal action against LG for using the LX brand for its new holding firm.
BY PARK EUN-JEE, YONHAP [email@example.com]