SEOUL, Sept. 17 (Xinhua) -- LG Chem, South Korea's biggest chemical company, decided Thursday to spin off battery business.
The battery unit, tentatively named LG Energy Solution, will be launched on Dec. 1, the company said in a regulatory filing. The new entity will be entirely owned by LG Chem.
Following the spin-off, the new entity would hold 10.26 trillion won (8.8 billion U.S. dollars) in assets, while LG Chem would have 24.73 trillion won (21.1 billion U.S. dollars) of assets.
The spin-off decision was made during an emergency board meeting on expectations that the battery industry can rapidly grow and generate great profit in the near future.
"We believe the spin-off would increase LG Chem's competitiveness and valuation over the medium to long term," Mirae Asset Daewoo, a local securities firm, said in a report.
"Amid rapidly growing electric vehicle demand, only a handful of companies are capable of supplying high-quality batteries. LG Chem, in particular, stands out among the top four suppliers due to its superb technology," it noted.
LG Chem shares declined 6.1 percent, underperforming the main KOSPI's 1.2 percent fall. Enditem
