April 23, 2024

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[THE INVESTOR] The shareholders of LG Life Sciences approved the merger with its battery-making affiliate LG Chem, paving the way LG Group to bolster its bio business to be a new growth engine.

The approval came at the shareholders meeting held at the headquarters of LG Life Sciences in Seoul on Nov. 28.

“By securing long-term and stable investment source through the merger, we expect the company will be able to make preemptive and drastic investments in new drug development to lead the market in the future,” an official at LG Life Sciences said.

The shareholders of LG Chem also approved the merger on the day.

The decision merge the two firms was made as LG Life Sciences failed to make a major breakthrough in the country’s pharmaceutical industry since it was spun off from LG Chem in 2002. The tie-up plan was announced in September.

“To take a leap as a global biopharmaceutical company, this is the time to strengthen core capability and secure a source for massive investments,” the official said.

The move comes as the country’s other conglomerates like Samsung and SK are tapping the drug business to find new revenue source.

LG Life Sciences’ investors will receive about 0.26 of a common share in LG Chem for each share they own and about 0.25 of a preferred share in LG Chem, the two companies said.

LG Chem expects to complete the merger by Jan. 1, 2017.

LG Corp. is the largest shareholder of LG Life Sciences, with a 30 percent stake in the firm.

By Park Han-na (hnpark@heraldcorp.com)