[THE INVESTOR] LG Chem
, the chemicals unit of LG Group, said on Sept. 12 that it will be merging with LG Life Science
, its smaller drug-making sister firm, within the year with aims to focus resources into nurturing biotechnology as its new growth engine business.
Shareholders of both companies approved the merger plan on the day. The final approval will be made on Nov. 28, with the new entity being launched on Jan. 1 next year.
Based on stock prices over the past three months, one LG Life Science share will be exchanged for 0.2606772 share in LG Chem. The figure for preferred shares is 1:0.2534945.
The cash-rich LG Chem has diversified its business portfolio ranging from basic materials and batteries to biotech more recently. In April, the company jumped into the bio business by acquiring agrochemical technology manufacturer Farm Hannong.
After the merger, the company plans to pour an annual 300 million won (US$270 million) to 500 billion won into research and development activities, more than tripling the investments that have been made for LG Life Science.
The company aims to increase its bio sales to 5 trillion won by 2025, becoming a global top five chemical company with a total revenue of 50 trillion won by the year.
“We will become a global player in the bio sector through aggressive and preemptive investments,” said LG Chem CEO Park Jin-soo in a statement.
By Lee Ji-yoon (firstname.lastname@example.org