LG Group, the fourth-biggest conglomerate in South Korea, will add a new holding firm before its planned leadership split-off, the group announced Thursday.
Spearheaded by the current holding company, LG Corp., LG’s affiliates announced organizational and personnel restructuring plans for 2021 as they were approved by each company’s board of directors.
LG was the first among Korea’s family-run conglomerates to announce its plans for next year.
LG Corp. said the group will split off four out of its 13 affiliates and establish a new holding firm under Koo Bon-joon, uncle of current LG Chairman Koo Kwang-mo.
The four affiliates are LG International, Silicon Works, LG Hausys and LG MMA.
The plan was reported earlier this month and approved by the company’s board of directors Thursday.
Considering that it would take several years to split the leadership of the group among members of the two owner families, LG will have two holding companies operating independently under a single roof for the time being.
The new holding company’s internal board members include Koo Bon-joon, LG International CEO Song Chi-ho and Senior Vice President Park Jang-soo from LG Corp.’s finance team.
The new firm will be officially launched May 1, after gaining shareholders’ approval March 26.
“The latest restructuring plan is aimed at reinforcing specialty and control of the holding companies for the group’s business portfolio,” a group official explained.
While LG Corp. will focus its capabilities on the electronics, displays, chemicals, battery and telecommunications businesses, the new holding company will concentrate on fostering the affiliates with growth potential in the fields of resource development, logistics, system-on-chip design and construction materials.
“The decision to simplify the governance structure will help reduce uncertainty when the split-off plan takes place in the future,” the official said.
The chief executive officers of major LG affiliates maintained their positions, which was a strategic decision aimed at weathering economic headwinds and protecting the current businesses amid the protracted COVID-19 pandemic.
Across the group, a total of 181 executives received promotions, including four new presidents and the CEO, in what the group called reshuffles carried out to seek innovation amid stabilization.
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Lee Bang-soo (LG Corp.) |
LG Corp. tapped Lee Bang-soo, head of corporate social responsibility, as president of the holding company. Lee’s role will be expanded for the sustainable management of the group.
Among the existing LG affiliates, LG Chem -- with an imminent plan to spin off its battery business -- conducted a large-scale personnel reshuffle.
Under current Vice Chairman Shin Hak-cheol, LG Chem’s Life Science Company will be headed by President Son Jee-woong.
LG Energy Solution, the new battery company, will be led by Chief Executive Officer Kim Jong-hyun, who now leads the battery business at LG Chem.
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Kim Jong-hyun (LG Chem) |
LG Electronics said it has promoted Lee Sang-gyu, the head of sales for Korea, to president.
As part of organizational restructuring, the electronics affiliate has created a new innovation center for North America under the current Chief Strategy Office, which will discover new business models and seek cooperation with leading technology companies in Silicon Valley.
Under its Chief Technology Office and Chief Executive Office, LG Electronics has created iLab for new technology development and CX Lab for customer experience.
The Global Marketing Center will get a market intelligence unit specialized in market research and analysis.
LG’s home appliances business will be headed by Executive Vice President Ryu Jae-cheol.
LG Household and Health Care tapped Yi Hyung-suk, head of the beauty division, as executive vice president.
By Song Su-hyun (
song@heraldcorp.com)
