By Oh Young-jin, Cho Jin-seo
Staff Reporters
Everything seems set for LG Electronics to join the fight for a piece of General Electrics (GE) but it all comes down to how the global ``white goods'' market will change.
Korea's electronics giant says it has the funds available to pay one third of the cost for the appliance unit, one of 27 units under the wing of the Connecticut based world's largest conglomerate, with the rest of the money to be financed. GE refuses to say which one of the prospective buyers it prefers but nonetheless wouldn't be unhappy to see LG join the fight.
This was all triggered by Nam Yong, the LG chief executive, who said at a press conference yesterday, ``It will be a very decisive moment that could change the structure of the global home appliance market, so naturally we are closely monitoring any developments in the situation.
``It is very difficult for a 50 trillion won company to achieve double-digit growth with the businesses we already have. It is true that mergers and acquisitions are an option for growth,'' Nam said.
Chun Myung-woo, vice president of LG's corporate communication team, refused to elaborate on Nam's remarks when asked whether he meant LG was ready to go for GE's appliance unit,
``We have enough cash to pay one third of its price at any time but the question is whether we need the appliance unit,'' Chun said during a telephone interview.
Chun said that LG products were already selling at a premium in the U.S. market, with many of the two companies' products overlapping. ``Do we need it?,'' he said. ``It is a question that needs a lot of consideration.''
Chun further added that the purchase of such a large asset required viewing from various angles, hinting that the price and line of products were not the only criteria. The other criteria would include a potential change in its U.S. market share, if the unit was sold to one of LG's competitors, such as Whirlpool or China's Haier.
Joh Byung-ryul, director of GE Korea, said, ``Because of the slumping U.S. economy, GE is considering ``strategic options'' such as a spin-off.
``I am not in a position to talk in detail about it,'' he said. Goldman Sachs is commissioned to arrange the sale of GE's appliance unit, which had a revenue of $7.2 billion last year.