The split of LG Group has become official to concentrate the fourth largest conglomerate’s resources on electronics and materials for new growth under Chairman Koo Kwang-mo by letting go off his uncle Koo Bon-joon to form a new umbrella under a trading parent.

LG Corp., the existing holding company of the group, announced Thursday that its board of directors approved a plan to restructure into two holding entities. For that, it will demerge LG International Corp. plus its subsidiary Pantos Logistics Co., LG Hausys, LG MMA and Silicon Works Co. and put them under a new holding company.

The spinoff ratio is set at 0.912 for the existing holding company and 0.088 for the new one based on their book value. Once the plan is finally approved at its regular shareholder meeting scheduled on March 26, the group will begin to operate with two holding firms on May 1, 2021.

As of 10:36 a.m. on Friday, shares of LG fell 0.65 percent to 76,700 won.

The Korea Exchange, South Korea’s sole stock exchange operator, said Thursday that it received an application from LG for preliminary screening for the spinoff and relisting plan.

After the spinoff, LG will focus more on the group’s key businesses including electronics, chemical and telecommunication, while the new one will nurture next growth engines.

LG International, the group’s trading unit, plans to strengthen its palm oil business and find new business opportunities in health care and environment sectors. The industrial materials and house interior materials provider LG Hausys will expand eco-friendly premium products and focus on high value-added interior service market.

The new holding firm will be under the management of 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. Koo Bon-joon currently serves as a senior advisor to LG since he stepped down from management in 2018 when Koo Kwang-mo took the helm after the death of his father. Koo Bon-joon holds a 7.72 percent stake in LG.

By Park Jae-young and Choi Mira

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