The Korean LG conglomorate has now agreed to hand over 100% of its stake in LG Semicon Co to its rival, Hyundai Electronics Inc. The firms agreed to terms after yesterday’s meeting with South Korean president Kim Dae-jung. LG owns 71% of LG Semicon, with the rest owned by minority shareholders. US consulting firm Arthur D Little Inc had recommended that Hyundai become the majority shareholder, but LG had initially refused to accept its findings. The government then put pressure on LG, with state controlled banks withdrawing funding support. LG changed its mind so as to avoid becoming an obstacle in industrial restructuring, it said in an official statement. The combined entity would command a 17% share of the world’s memory chip market, coming second only to South Korea’s Samsung Electronics Co, which has a 20% market share. A price has yet to be set.
