GS formally splits from LG

Legal work for the spin-off of GS Group, a holding company, from LG Group was completed yesterday when the anti-monopoly agency approved the separation.
The Fair Trade Commission approved yesterday the transfer of 14 former LG affiliates to GS Group. By doing so, it officially recognized the birth of Korea’s seventh-biggest company, whose total assets are estimated to be 16 trillion won ($1.5 billion) as of the end of 2003.
With GS Holdings as its flagship company, former LG affiliates such as LG-Caltex Oil, LG Mart and LG Home Shopping will now fall under GS. GS officials have already announced that these companies will be renamed.
GS Holdings will be led by Huh Chang-soo, chairman of LG Engineering and Construction Co., and a grandson of Hur Man-jung, one of the co-founders of LG Group.
Koo Bon-moo, a grandson of the other founder, Koo In-hwoi, heads LG Group.
In effect, the departure of GS is part of a three-way spin-off of the No.2 conglomerate. On Jan. 19, LG Cable and Machinery Ltd. renamed itself LS Group, whose focus is comprehensive business solutions. With 16 affiliated companies and estimated total assets of 5. 1 trillion won, LS ranks 22nd in Korea. John Koo, a cousin to Koo Bon-moo, leads LS.
The breakup, which was in progress for several years, proceeded amicably, following long decades of cooperation between the founding families.
When the two joint founders agreed to a business partnership 57 years ago, it was not merely a marriage of convenience: The two families were in fact connected by marriage.
In 1947, Mr. Hur, a distant cousin of the father-in-law of Mr. Koo, offered to fund a company that the latter was founding. (The company later became LG Chem Ltd.) In return, he asked that Mr. Koo train his son in management.
Along with other top Korean conglomerates, LG Group grew as it diversified into various industries during the government-led export drive. During that process, the Koo and Hur families maintained an amicable relationship.
LG Group has a total of 37 companies in electronics, chemicals, telecommunications and services. GS Group ― G means “good service,” and S is for “great satisfaction” ― has said that it will focus on retail and services. It is working with a U.S. firm, Landor, to create a new corporate image by April.

by Kim Ji-soo