Lotte Chemical said in a regulatory filing on Aug. 22 that its management had agreed to merge with wholly owned subsidiary Lotte Advanced Materials.
Seoul-based Lotte Chemical’s board of directors agreed on a planned market extension merger between two subsidiaries of the Korean-Japanese Lotte conglomerate. Once the merger takes place, Lotte Advanced Materials will be merged into Lotte Chemical.
The merger is expected to be complete by January 2020, following a shareholders’ meeting in November.
Lotte Chemical's Yeosu plant
Dissenting shareholders of Lotte Chemical may present veto rights during Sept. 6-20. The merger will be scrapped if opposing stakeholders account for a combined stake of over 20 percent.
Lotte Chemical’s major shareholders include Lotte Corp. with 23.24 percent, Lotte Property & Development with 20 percent and Lotte Holdings with 9.3 percent. Minor shareholders own 42.59 percent of Lotte Chemical.
The disclosure came weeks after Lotte Chemical, which already held a 90 percent stake in Lotte Advanced Materials, bought the remaining 10 percent stake from Samsung SDI for 279.5 billion won ($231 million).
Formerly a chemical material making operation of Samsung SDI, Lotte Advanced Materials got its new name after a split-off from Samsung SDI and 2.3 trillion won acquisition by Lotte in 2016.
Lotte Advanced Chemicals is based in the coastal city of Yeosu, South Jeolla Province.
Both Lotte Chemical and Lotte Advanced Materials have presence in plastic polymer market. Lotte Chemical produces polyethylene and polypropylene, while Lotte Advanced Materials makes acrylonitrile butadiene styrene and polycarbonate.
By Son Ji-hyoung (email@example.com)