South Korea’s Hyundai Group has at last reached an agreement with the LG Group to buy its memory chip business, a government official said on Thursday. A price of approximately $2.13 billion was agreed for the sale after three months of negotiating. The money will be paid in cash, securities and equity, with around $800m of the total expected to be paid in installments over the next two years.
Lee Hun-jae, head of the government’s Financial Supervisory Commission, which has been pushing to restructure the country’s massive chaebol conglomerates to help ease the financial crisis, said the merger was now a done deal. Only procedural matters were now left, he told the AP newswire. But the companies themselves have not yet confirmed that the deal is complete.
Under the agreement, Hyundai will take a stake just under 60% in LG Semicon, with the rest of the shares held by individual minority shareholders. Using last year’s figures, the resulting company would hold nearly 21% of the worldwide memory chip market, just ahead of Samsung Electric Co, which had 20.1% in 1998.
According to the Yonhap News agency, Hyundai has also guaranteed job security for LG Semicon workers, one of the biggest sticking points in negotiations.
