LG Chem Acquires LG Electronics Separator Business for 525 Billion KRW

LG Electronics Acquires All Tangible and Intangible Assets Including CEM Business Production Facilities and Workforce for Separators
Maintains Employment of All 800 Domestic and International Employees

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] LG Chem is expanding its business portfolio by acquiring LG Electronics' separator business to become the world's largest comprehensive battery materials company.

On the 29th, LG Chem held a board meeting and approved the business transfer agenda to acquire the Chemical & Electronic Materials (CEMl) division under LG Electronics' BS (Business Solutions) headquarters for 525 billion KRW. The acquisition includes all tangible and intangible assets such as production facilities and personnel of the business division.

LG Electronics' CEM division produces battery materials such as separators and display materials, with production facilities located in Cheongju, Korea; Hangzhou, China; and Wroclaw, Poland in Europe. All 800 domestic and overseas employees will retain their employment.

LG Chem decided to acquire LG Electronics' CEM business, which has both growth potential and synergy effects between businesses, to focus on nurturing the battery materials business as a new growth engine.

With this separator acquisition, LG Chem has become the only company in the world possessing key technologies applied to the four core battery materials globally, alongside its existing businesses in cathode materials, anode binders, electrolyte additives, and CNT (carbon nanotubes).

Developing Next-Generation Separator Products with World-Class Safety and Competitiveness, Growing Separator Business to Trillion-KRW Scale

Based on its self-developed next-generation coating technology and LG Electronics' productivity maximization capabilities, LG Chem plans to nurture the separator business to a trillion-KRW scale within a few years by developing products with world-class safety and competitiveness.

LG Chem holds the SRS® (Safety Reinforced Separator) technology, which significantly enhances safety and performance by thinly coating the separator surface with ceramic materials, and has additionally secured next-generation coating technologies that further improve the heat resistance of separators through continuous R&D.

LG Electronics' CEM division possesses processing capabilities that enable the world's fastest separator coating speed, maximizing productivity.

According to market research firm SNE Research, the global secondary battery separator market is expected to grow at a compound annual growth rate of 27.9%, expanding from approximately 4.1 trillion KRW this year to about 11 trillion KRW by 2025.

To become the world's number one comprehensive battery materials company, LG Chem plans to invest 6 trillion KRW by 2025, focusing on nurturing battery materials such as cathode materials, separators, anode binders, thermal adhesive agents, and CNT, including this acquisition.

The cathode materials business aims to become a global leader, with plans to start construction of a 60,000-ton annual capacity plant in Gumi this December. As a result, LG Chem's cathode material production capacity will increase about sevenfold from 40,000 tons in 2020 to 260,000 tons in 2026.

To ensure stable supply of metals used in cathode materials, LG Chem is preparing joint ventures with mining companies. It will actively pursue various collaborations with companies possessing mining and refining technologies to strengthen metal sourcing competitiveness.

In particular, LG Chem plans to proactively invest R&D resources in products such as cathode materials, separators, anode binders, and thermal adhesive agents to differentiate technologies and secure market leadership. This is because the battery materials market, expected to grow rapidly from 39 trillion KRW in 2021 to 100 trillion KRW in 2026, will see increased demand for material innovation to improve performance and reduce costs. In line with the high-growth battery materials market outlook, CNT production capacity will also be expanded more than threefold from 1,700 tons in 2021 to 2025.

LG Chem Vice Chairman Shin Hak-cheol said, "Through this acquisition, we have strengthened the value chain of the rapidly growing battery materials business," adding, "We will actively nurture the separator business and continuously discover businesses with growth potential to leap forward as the world's number one comprehensive battery materials company."