LG Group is likely soon to decide on whether to separate several affiliates such as LG International, LG Hausys, and Pantos Logistics which will be led by LG Group advisor Koo Bon-joon, the third son of late LG Group honorary chairman Koo Cha-kyung and a younger brother of late LG Group chairman Koo Bon-moo.
The plan is expected to be finalized at an upcoming board meeting, according to industry sources on Monday.
The separation has been widely expected as part of a potential leadership succession plan since the death of Koo Bon-moo and his adopted son Koo Kwang-mo took the helm of the country’s fourth largest conglomerate in line with its long held tradition. The late entrepreneur adopted the current LG Group chairman from his younger brother Koo Bon-neung in 2004.
Koo Bon-joon controls 7.72 percent in LG Group’s parent company LC Corp. He could go independent with LG International, LG Hausys and other affiliates under his helm by swapping his stake in LC Corp. for those affiliates.
Earlier, LG International sold its stake in LG Group’s headquarter building LG Twin Tower in Yeouido, Seoul to LC Corp. to be relocated in Gwanghwamun. Koo Kwang-mo and other family members sold off 19.9 percent stakes in Pantos, a logistics firm under LG International, which seems to be part of a business separation plan. After the separation, LG Group will further focus on electronics and chemistry business. LC Corp. is the largest shareholder of LG International and LG Hausys with 25 percent and 34 percent, respectively. LG International owns 51 percent in Pantos.
LG Group has shown a rare case of peaceful generational succession among family-owned conglomerates in Korea as it has maintained a principle of handing over power to the chairman’s eldest son whenever there is a transition of leadership since its founding. Under this principle, siblings of the group’s outgoing chairmen let go their ownership, spinning off into Ourhome in 2000, LS Group in 2005 and LG Fashion (currently LF) in 2006.
By Lee Jong-hyuk and Minu Kim
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