Koo Bon-joon, Advisor of LG Group
[Asia Economy Reporter Changhwan Lee] Bonjun Koo, an advisor at LG Group, is concretizing plans to spin off LG International, LG Hausys, and others from LG Group to become independent.
According to industry sources on the 16th, LG Corporation, the holding company of LG Group, is expected to hold a board meeting around the 26th of this month to spin off LG International, Pantos, LG Hausys, and others. The spin-off plan is anticipated to be announced along with the year-end regular personnel reshuffle.
The companies to be spun off will be taken over by Advisor Bonjun Koo. Advisor Koo is the younger brother of the late Bonmoo Koo, former chairman of LG Group. Since the death of Chairman Koo two years ago and the inauguration of his nephew Kwangmo Koo as LG Group chairman, the possibility of Advisor Koo’s spin-off has been steadily raised.
Since LG Group has been gradually preparing for the spin-off since last year, there has been speculation that Advisor Koo’s independence is highly likely.
Last year, LG International sold its stake in the Yeouido LG Twin Towers, which served as LG Group’s headquarters, to LG Corporation and relocated to the LG Gwanghwamun Building. Also, special related parties including Chairman Kwangmo Koo sold all their 19.9% stake in Pantos, LG International’s logistics subsidiary, at the end of 2018.
Advisor Koo holds a 7.72% stake in LG Corporation. It is expected that he will use this stake, valued at 1 trillion won, to acquire shares in LG International and LG Hausys to become independent.
LG Corporation holds 24.69% of LG International and 30% of LG Hausys. LG International owns 51% of Pantos. The combined sales of LG International, Pantos, and LG Hausys, which are subject to separation, account for slightly less than 10% of LG Group’s total sales. It is analyzed that the spin-off will be completed by handing over some non-core affiliates to Advisor Koo while retaining the main electronics and chemical businesses.
There are also prospects within and outside the group for the spin-off of Silicon Works, a semiconductor design company, and LG MMA, a chemical materials manufacturer.
Following LG Group Tradition Since the Previous Generation, Advisor Bonjun Koo Also Spins Off
Advisor Koo’s spin-off follows the tradition of LG Group since the previous generation. When the previous chairman passed away, the eldest son took over group management, and the younger brothers separated to run independent businesses, continuing the 'brotherly independent management' system tradition.
Advisor Koo served as CEO of LG Electronics for six years from 2010 and as Vice Chairman of LG Corporation from 2016 until March last year. During his tenure as Vice Chairman, he effectively oversaw LG Group on behalf of his elder brother, the late Chairman Bonmoo Koo.
After Chairman Bonmoo Koo’s death, when Kwangmo Koo took office in June 2018, Advisor Koo stepped down to an advisory position and withdrew from frontline management.
An industry insider said, "The speculation about Advisor Bonjun Koo’s independence has been steadily raised for several years," adding, "Considering the company size, even if LG International or LG Hausys are spun off, the impact on the entire LG Group will not be significant."
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