LG Chem Ltd, a prominent South Korean petrochemicals manufacturer, has announced its decision to divest its polariser businesses to Chinese companies in a strategic move aimed at enhancing its competitiveness in the market. The transaction is valued at approximately 1.1 trillion Korean Won (approximately $815.6 million USD).
The polariser business division of LG Chem is set to be sold to Shanjin Optoelectronics (Suzhou) for 270 billion Korean Won, while the polariser material business will be acquired by Hefei Xinmei Materials Technology for 830 billion Korean Won. These transactions were disclosed in an official regulatory filing by LG Chem.
The primary objective behind this divestiture is to optimize the allocation of resources within the company. The polariser businesses, which specialize in the production of optical filters utilized in electronic devices and automobiles, are being relinquished as part of LG Chem’s strategic realignment.
It is worth noting that LG Chem has previously articulated its growth strategy, focusing on key areas such as battery materials, sustainability initiatives, and innovative pharmaceuticals. These segments are anticipated to constitute a substantial portion, approximately 57%, of the company’s total sales by the year 2030.
The business assets and operations to be acquired by Shanjin Optoelectronics and its wholly-owned subsidiary encompass locations in mainland China, South Korea, and Vietnam. In a statement to the Shanghai Stock Exchange, Ningbo Shanshan, the parent company of Shanjin Optoelectronics, disclosed its intentions to relocate the South Korea-based production facilities to China as part of the acquisition.
The acquisition package encompasses polariser products tailored for organic light-emitting diode (OLED) displays, as well as polariser products designed for liquid-crystal displays (LCDs) primarily used in automobiles and Apple products, according to Ningbo Shanshan’s announcement.
Notably, LG Chem currently holds a 15% stake in Shanjin Optoelectronics. Ningbo Shanshan aims to finalize the acquisition of this stake by October, as indicated by the Chinese company’s statement. This strategic move reflects the evolving landscape of the chemical industry and LG Chem’s commitment to optimizing its business portfolio for future growth and sustainability.