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Tesla Supplier LG Chem To Spin-Off Battery Business In December: Report

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Tesla Supplier LG Chem To Spin-Off Battery Business In December: Report

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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