Big 5 Plan Epoch-making RestructuringThe five biggest chaebols are planning an epoch-making restructuring.
According to the plan, the big five intend to attract 10 billion dollars in foreign capital, abandon their management style which resembles a mother duck carrying its ducklings, sell some main subsidiaries among the chaebols and complete rapidly so called big deals, including the big deal between Samsung Motors Co. and Daewoo Electronics Co..
Chief Executive Officers of the big five including Kim Woo Jung, chairman of Daewoo group and the Federation of Korean Industries (FKI), agreed on November 28 that they will admit the restructuring plan and intentions by the government.
The CEOs will announce their concrete plans on December 7 when President Kim Dae Jung will preside over a meeting between the business sector and the government.
According to the plan agreed between the CEOs, the big five will proclaim that they will renounce their outdated management style and divide their groups into small groups according to certain key industries.
Accordingly, the number of their subsidiaries is forecasted to drop by 40%.
Hyundai's main industrie will be likely diminished to five including cars, petrochemical and heavy industry. Samsung will focus on four sectors including electronics and financial services.
LG will focus on four including petrochemical and information and telecommunications, while Daewoo will center on three areas, and SK will stick to oil refining and information and telecommunication.
To do so, the big five will sell even subsidiaries with good operating records to foreign investors or domestic companies.
A source at the FKI forecasted that in this scenario, there is high possibility that one or two companies will be sold per each chaebol.
A source at the government said, ' The plan which the big five will announce is not a simple proclamation but a complex deal with concrete implementation details.'
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