LG Chem, Ltd shareholders have given the go-ahead to the company’s management to spin-off its battery business into a new entity, Reuters reported Friday (Seoul Time).
What Happened: The new unit, to be launched on Dec. 1, will be called LG Energy Solutions and would be a wholly-owned subsidiary, according to Reuters.
The Tesla Inc (NASDAQ:TSLA)-supplier can now reportedly take its battery business public to fuel its expansion.
A source told Reuters that more than 82% of the shareholders who attended the meeting voted in favor of spinning-off the battery business.
Why It Matters: Up to 30% of the new company’s shares may be listed in an initial public offering in nearly a year’s time, Reuters reported.
LG Chem’s CEO Hak Cheol Shin said this month that the battery maker was in talks with a “couple” of automobile manufacturers to set up joint ventures.
The company already has JVs with General Motors Company (NYSE:GM) and Geely Automobile Holdings Limited (OTC:GELYF).
The South Korean company, in which the Elon Musk-led Tesla is said to be eyeing a stake, is also a major battery supplier to General Motors and Ford Motor Company (NYSE:F).
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