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(Japanese Site)

  • Korean Conglomerates Look Toward Business Cooperation
  • June 11, 1998 (SEOUL) -- Korea's three largest conglomerates, the Samsung, Hyundai and LG groups, will soon announce plans to swap some of their major businesses, according to high-ranking political sources.
    An aide to Park Tae-joon, president of the coalition United Liberal Democrats, said that the three conglomerates have agreed in principle to make large-scale deals. Park is spearheading efforts for sweeping reforms within Korea's business community.

    The Hyundai and LG groups will transfer their semiconductor businesses to the Samsung Group, while the LG Group will take over Samsung's home electronics arm and Hyundai's information and communication business lines. At the same time, the Samsung Group will transfer its petrochemical business to the Hyundai Group and its fine chemical business to the LG Group.

    Industry watchers said it is likely that the Samsung Group will sell its auto division to the Daewoo Group, while the Daewoo and Hyundai groups will jointly acquire the bankrupt Kia Motors Corp. Creditor banks of the Hyundai and Samsung groups said they have already received business swap propositions from the two conglomerates, suggesting that their agreements are almost complete.

    However, the three business groups denied that any concrete agreements have been reached.

    "The big deals are almost impossible to reach now because of many business complications, including new asset evaluation standards and different corporate environments among companies," an industry analyst said.

    Meanwhile, the Korean government is revising laws to provide tax incentives to companies seeking to restructure as a way to improve their finances.

    (Maeil Business Newspaper)

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    Updated: Wed Jun 10 16:03:34 1998