Samsung SDI Co., the battery and chemical arm of South Korea's top conglomerate Samsung Group, decided Monday to spin off the chemical business in the runup to its handover to Lotte Group.
In an emergency meeting, shareholders of Samsung SDI agreed to establish the entity, tentatively named SDI Chemical, next month and eventually sell its 90 percent stake to Lotte Chemical Corp. by the end of the first half.
In October, Samsung Group agreed to sell its chemical assets to Lotte Group for about 3 trillion won ($2.5 billion). Under the plan, Lotte Chemical will acquire a 31.5 percent stake in Samsung Fine Chemicals Co. and buy the stake at Samsung SDI's chemical unit.
Following the spin-off, Samsung SDI will focus on its electric vehicles and battery businesses.
"Samsung SDI will funnel the proceeds from the sale of the chemical unit into the electronics vehicles segment," CEO Cho Nam-seong said in opening remarks. "The company will invest more than 3 trillion won till 2020 to emerge as a global leader in the car battery business."
The latest deal is the second of its kind since Samsung's de facto head Lee Kun-hee was hospitalized in 2014, temporarily handing over the post to his son Jae-yong. Since then, Samsung has been making various restructuring efforts to pave the way for the management inheritance.
In 2014, Samsung also sold four of its defense and chemical units to the Hanwha Group, a deal estimated at around 1.9 trillion won.
Samsung SDI earlier reached an agreement with workers of its chemical arm to guarantee their jobs and improve labor conditions after the spinoff. (Yonhap)