Koo Bon-joon, chairman of LX Group, is speeding up business expansion by implementing aggressive mergers and acquisitions (M&As) shortly before the one-year anniversary of when he became independent of LG Group and established a new business group, according to company officials, Thursday.
On May 1, LX Group, which has a range of businesses, from trading of industrial materials, logistics and semiconductor design to building materials, will celebrate its first anniversary.
Among its subsidiaries, LX International, a trading company of the group and formerly known as LG International, is playing a leading role in terms of diversifying the group's business portfolio through active M&A activities.
In March, its board approved a 100 percent acquisition of Hanglas for 592.5 billion won ($465.7 million) from the private equity company Glenwood PE. Established in 1957, Hanglas is Korea's No. 2 glass manufacturer with a market share of around 20 percent. With the acquisition, LX International plans to advance into eco-friendly products in the glass industry.
A month before finalizing the acquisition of Hanglas, LX International also announced it launched a subsidiary named Eco&Logis Busan Corp. and plans to construct an eco-friendly logistics complex in the southeastern port city of Busan by investing 45 billion won.
With the new facility, which will be completed and will go into operation in early 2025, Eco&Logis Busan will offer logistics services utilizing renewable energy. In addition, LX International said on April 19 that it will advance into eco-friendly biomass power generation as well by acquiring Poseung Green Power for 95 billion won.
"LX International is seeking to transform its eco-friendly business portfolio in line with the trend of strengthening ESG investment principles," a company spokesman said.
The trading arm of LX Group posted its first-quarter earnings on Thursday, calling it the best-ever quarterly performance.
It said that its sales were at 4.91 trillion won in the first quarter, up 33.5 percent year-on-year, and its operating profit reached 245.7 billion won, up 116.9 percent from a year ago.
"External business conditions improved, with resource markets such as coal and palm oil rising and shipping rates rising," the company official said. "Also, our profit maximizing efforts such as increased production led to a growth in all business sectors including resources, trading and logistics."
Aiming to become chip powerhouse
Not only LX International but also the group's semiconductor design arm LX Semicon is seeking M&As to become a chip powerhouse in the global market.
A spokeswoman of LX Holdings, the holding company of the group, confirmed the group is reviewing the acquisition of U.S. stock market-listed semiconductor company Magnachip Semiconductor.
"It is true that the group is under consideration for acquiring Magnachip. In terms of its growth strategy, the group is considering various M&A opportunities and one of them is Magnachip," the official said.
The official added that none of the affiliates had yet been determined, in regards to which company would take over Magnachip, but the industry expects LX Semicon, which is in charge of the group's semiconductor design, to jump into the acquisition race.
LX Semicon is designing various kinds of chips including display driver integrated circuit (DDI) chips. Given DDI chips for TVs and smartphones are the main business of Magnachip, LX Semicon is expected to create a synergy effect when it actually acquires the company.
"LX Semicon is the country's leading fabless company and plans to diversify its portfolio for sustainable growth by strengthening its capabilities in micro controller units, sensors and power semiconductors as well as its flagship DDI chips," the group official said.
