LG Chem in talks to sell off water solutions unit at W1tr
LG Chem has reportedly selected Glenwood Private Equity as a preferred bidder to acquire its water solutions business, which specializes in manufacturing reverse osmosis membranes, owning the world's second-largest market share in the sector. The RO membranes desalinate seawater, and the recycled water is used for industrial purposes.
The unit's valuation is expected to stand at around 1 trillion won ($695 million). In 2024, it posted 250 billion won in revenue, 65 billion won in earnings before interest, taxes, depreciation and amortization, or EBITDA.
Glenwood is an alternative investment firm headquartered in Seoul with cumulative assets under management of $3 billion. The PE has developed a close relationship with LG Chem, having acquired its diagnostics business, now renamed Invitros, in 2023.
'Glenwood has made its name here by specializing in corporate carve-out deals,' an official from a local private equity company commented. A carve-out deal refers to a situation where a parent company sells its business unit to an outside investor, making the unit a separate entity.
With the acquisition of the water solutions unit, the PE is expected to seek to boost synergy with its portfolio company Techcross Environmental Services. In 2024, Glenwood acquired the ballast water treatment system company, then-named HiEntech from Bubang Group. Before being acquired by Bubang Group, HiEntech was a sewage treatment operation owned by LG Electronics.
LG Chem's water solutions unit was expected to be the chemical giant's key growth engine. In 2023, the company decided to invest 125 billion won in the RO membrane plant located in Cheongju, North Chungcheong Province, to double the water treatment business within five years.
Industry officials assume LG Chem may be trying to streamline its business and secure liquidity amid a challenging business landscape.
Last month, LG Chem Vice Chair and CEO Shin Hak-cheol pledged to accelerate growth in the company's three key sectors: advanced materials, life sciences and sustainability.
'Within the three major growth engines, we will set priorities and enhance competitiveness through strategic selection and focus,' Shin said at the general meeting of shareholders held on March 24.
A few days after, LG Group Chairman Koo Kwang-mo shared a message on a similar note, urging the group's top executives to act with a "sense of urgency" and embrace change, similar to its conglomerate peer, SK Group's restructuring drive.
"With a sense of urgency, we must break away from past inertia and the misalignment between strategy and execution,' Koo said at the conglomerate's first executive meeting of the year held on March 27.
He also emphasized the importance of focus and prioritization, saying, 'The reality is that we cannot do all businesses well, which is why we must focus and prioritize.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
32 minutes ago
- Korea Herald
Court nullifies 'forced inheritance' from bed-ridden father
A South Korean court has ruled that an inheritance agreement signed by a man recovering from heart surgery is invalid, saying it was signed under coercion from his children. According to the Suwon District Court, the three plaintiffs — his children — argued that their father should honor an April 2023 agreement to give them the proceeds from the sale of his apartment, which was to be completed by July 10. The contract also stated that if the father was found hiding "even 1 won" of assets, he must transfer them within a week. The defendant, a wealthy businessman and company founder, had already passed on assets worth 1.6 billion won (about $11.6 million) to his children by 2022. After his wife's death, he lived in the apartment with his girlfriend. The plaintiffs argued that the couple should not be living in a property still partly under their late mother's name and demanded ownership. The apartment was sold for 2.9 billion won. Of that, 1.8 billion won was used by the father to purchase a new unit in a commercial-residential building, which he legally designated to his grandchildren. However, his children sued him, demanding the entire 2.9 billion won. The court ruled that the contract is void, citing clear evidence of coercion. It noted that the man signed the agreement just 12 hours after having heart surgery, at 1 a.m., while still in poor physical condition. "It appears the plaintiffs pressured their father into signing the agreement while he was unwell. Given the circumstances and terms, the contract violates 'good morals and social order,'" the court said, citing Article 103 of the Civil Act, which nullifies acts contrary to public morality. The court added that the children's behavior — such as checking their father's finances, including any hidden assets, through his company employee — was 'abnormal and emotionally damaging,' and likely impaired his judgment.
Korea Herald
3 hours ago
- Korea Herald
Some conglomerates pay out dividends to owner family through unlisted firms despite sluggish performance
Some family members of South Korean conglomerates have received large dividends from unlisted affiliates, despite a broader economic slowdown driven by political instability and concerns over US tariffs, financial data showed Sunday. According to audit reports posted on the electronic disclosure system by the Financial Supervisory Service, Samyang International Co., an unlisted affiliate of GS Group engaged in golf and tobacco retail, paid out a total of 10 billion won ($7.25 million) in dividends over the past year. The dividend payout exceeded the firm's annual net profit of 9.19 billion won. Of the 10 billion won, an estimated 8.2 billion won is believed to have gone to three members of the GS Group founding family, including Huh Joon-hong, the company's largest shareholder and heir apparent of the conglomerate. Huh and his relatives have also received dividends worth a combined 13.2 billion won from two other unlisted affiliates, including Samjoung Development Co. Meanwhile, K Cube Holdings Co., a company wholly owned by Kakao Corp. founder Kim Beom-su, has decided to pay out 15 billion won in dividends despite a net loss of 3.35 billion won last year. Gwangyoung Construction Co., an unlisted affiliate of real estate giant Booyoung Group, recently distributed 16.3 billion won to Chairman Lee Joong-keun and 3.2 billion won to his eldest son, Lee Sung-hoon, even though the company's net profit stood at just 14.7 billion won last year. Experts noted that the government should tight regulations on corporate governance and the oversight role of boards at unlisted firms. "Financial sanctions should be strengthened for suspicious transactions between listed and unlisted companies," said Lee Hyo-seob, a researcher at the Korea Capital Market Institute. "Reward systems for whistleblowers also need to be significantly enhanced." (Yonhap)
Korea Herald
a day ago
- Korea Herald
Lee urges citizens to dine out as part of efforts to boost domestic demand
President Lee Jae Myung said Saturday that he hopes citizens would join a move to dine out as part of efforts to boost domestic demand. On Friday, Lee had dinner at a restaurant in central Seoul with his staff in a way to promote dining out to help small-sized brick-and-mortar restaurants and small merchants, overcome a slump amid sluggish domestic demand. "I personally hope citizens would visit nearby restaurants to promote and cheer on their businesses ... which will in turn revive the local economy and become an impetus for a bright future of South Korea," Lee said in a social media post. Lee's remarks came as the country will begin distributing cash handouts to all citizens on July 21 as part of a government initiative aimed at stimulating domestic consumption. All South Korean citizens residing in the country will receive a one-time payment of 150,000 won, depending on their income levels. Lee earlier instructed senior aides to draw up measures to maximize the effects of cash handouts, which is a part of an extra budget as a stimulus package to boost private consumption. (Yonhap)
