(Japanese Site)
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| Korean Conglomerates Look Toward Business Cooperation
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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.
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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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