LG Chem is planning to separate its secondary battery business that is at the top globally and establish a new corporation that exclusively deals with secondary battery this December because it believes that this is the right time to grow its battery business even more while the global electric vehicle market continues to grow. Its plan is to prepare a foundation to generate structural profits from its battery business that is seen as a “post semiconductor”.
LG Chem announced on Thursday that it held a board of directors meeting and decided to separate its battery division. It plans to physically separate the division and own 100% of the separated company. This decision is expected to pass through during an extraordinary meeting of shareholders that will take place on October 30. The new corporation will be established on the first day of December with a tentative name called “LG Energy Solution”.
“We believe that this is the right time to separate our battery division due to a fast growth of the global battery industry and increased profit making from the electric vehicle battery field.” said LG Chem. “We will be able to focus on battery business even more by establishing a separate corporation and raise the value of the company and our shareholders by being more effective in management.”

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<Researchers from LG Chem are inspecting an electric vehicle battery manufactured from the company’s Ochang Plant.>

LG Chem established a foundation to generate profit from its electric vehicle battery business this past second quarter and made its biggest quarterly operating profit. Because it has secured more than $128 billion (150 trillion KRW) worth of orders from its electric vehicle battery business and is investing more than $2.56 billion (3 trillion KRW) in facilities and equipment annually, there has been a higher need to secure large investment funds at the right time. It will be able to attract large investments funds through a split-off and ease some financial burden by establishing a separate financial structure for its battery business.
Regarding the physical separation, LG Chem explained that increased value of the new corporation from its growth will have positive effects on LG Chem and that it considered advantages of synergy that LG Chem and LG Energy Solution can create by working together in R&D for battery materials such as cathode material. Although whether the new corporation will go through an initial public offering or not has not been decided yet, LG Chem plans to look into it as time goes on.
LG Chem plans to develop LG Energy Solution into a world’s top energy solution company that makes $25.6 billion (30 trillion KRW) in annual revenue by 2024. Rather than just having LG Energy Solution manufacture and sell battery materials and cells and packs, LG Chem plans to grow LG Energy Solution into a company that will become competitive in the E-platform field and provide various services such as battery care and lease, charge, and reuse. In addition, LG Chem also plans to make appropriate investments in its petrochemistry, advanced material, and biotechnology businesses and establish a balanced portfolio with its battery business. LG Energy Solution is estimated to make about $11.1 billion (13 trillion KRW) in revenue this year.
Staff Reporter Kim, Jiwoong | jw0316@etnews.com