Interest in LG big deal is getting attention as Samsung and SK have succeeded in mega deal of several trillion won. LG, which was relatively conservative in merger and acquisition (M & A) relative to Samsung and SK Group, is predominantly looking to achieve a big deal this time, as it shows a strong commitment to nurturing new businesses.

According to local media such as business circles and APA on October 9, LG Electronics and holding company LG are offering USD 1.5 billion (KRW 1.70 trillion) in the purchase of Austrian lighting company ZKW from USD 1.2 billion and it is known that the deal can be done. LG Electronics and ZKW have not been confirmed yet, but according to the decision of both owners, it is said that the big deal may take a quick break.

An expert familiar with LG said, "There will be a burden which we have to make sure that the acquisition plan is already known to the outside world. We already know that ZKW is also the owner of the company.”

LG has been known as a passive company for M & A so far. The biggest M & A deal is the The Face Shop, which LG Household & Health acquired in 2006 for KRW 466.6 billion, and LG Chem, which bought Palm Hanon for KRW 424.5 billion last year.

However, this year, LG Vice Chairman Koo Bon-joon is responsible for overall management, and the trend is changing. The former Vice Chairman led the new business such as the automotive electronics (electronic device) business, and led the establishment of LG Electronics VC business division in 2013.

Besides, the strong sales network of ZKW can be a trigger for strengthening LG`s battlefield business. Last year, ZKW, with 7452 employees, supplies automotive lighting to more than 21 finished car companies including BMW, Audi, Volkswagen, Volvo, Porsche, Mercedes-Benz, Ford, Infiniti and Rolls-Royce. Last year`s sales were EUR 970 billion (about KRW 1.3 trillion).

"As Samsung and SK have a mega deal, they are raising the value of the company by fostering future growth and rising share prices. We believe that this M & A will set the stage for further growth. I can do it with the market cap of LG affiliates rising."

By Park Jung Il comja77@


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