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LG Chemical’s Board Approves Spin-off

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By: TOM BRANNA

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LG Chemical, Ltd., the largest chemical company in Korea, announced today that the company’s board approved its plan to demerge the company into three separate companies: LG Chem Investment, Ltd.; LG Chem Ltd. and LG Household & Health Care, Ltd. The company will open an extraordinary general meeting on Dec. 28. If the plan is approved, the actual spin-off will take place on April 1.

The proposed demerger is a significant step for LG Chemical in its on-going efforts to create shareholder value. The company expects that as a result of the demerger, investors will be able to better appreciate the intrinsic value of its various businesses.

The demerger will potentially maximize value by increasing the opportunity for each of the demerged companies to focus on its core businesses and redeploy its corporate resources toward its business plan. The demerger has three main objectives: restore investor confidence; increase management autonomy and accountability and form clearly differentiated business. The company said the move will allow LG to be more effectively managed and governed, while potentially increasing market awareness to the value contained in each of the three companies. For the year ended March 31, LG’s household and personal product sales totalled $739 million.

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