LG Group will not buy Hynix Semiconductor
By Kim Yoo-chul
LG Group said Friday it will not buy Hynix Semiconductor, dismissing market speculation that the group will join a bidding race for the purchase of a major stake in the world’s No. 2 computer memory chipmaker.
Shares in the Icheon, Gyeonggi Province-based chip manufacturer soared to 6.64 percent to end at 22,500 won Friday, on growing expectations LG Electronics may invest in Hynix intensified after LG named a new chief executive.
``LG Electronics has no interest in Hynix and will not change its current stance even under the new CEO,’’ said Chung Sang-kook, executive vice president of LG Group’s corporate communications, in an interview with The Korea Times.
``Market participants are saying the former LG Electronics CEO Nam Yong’s resignation has ignited hopes for LG to invest in Hynix. But this is untrue,’’ said Chung.
His remarks came a few hours after LG appointed Koo Bon-joon, the younger brother of Group Chairman Koo Bon-moo, as the chief executive of LG Electronics, to replace the outgoing Nam.
The executive added that a decision on whether to take over Hynix or not would be made by LG Group, not LG Electronics.
``LG Electronics will focus more on strengthening its competitiveness especially in smartphones, as well as flat-screens. LG has no time to seek big acquisition deals such as the Hynix one,’’ said Chung.
According to the executive, LG Group has been receiving proposals from Hynix creditors to buy a 15.9 percent stake, despite LG Chairman Koo and the new LG Electronics CEO having already reached a consensus that they will not buy the chipmaker.
James Kim, the head of Hynix’s investor relations team, declined to comment, while officials at Hynix’s creditors’ banks were also mum over the comment.
LG Group has commonly been referred to as the most ``plausible buyer’’ for Hynix stakes despite its denials after LG departed from the semiconductor business in 1998 as the part of the then government’s ``big deal’’ policy.
The new LG Electronics chief executive Koo was the head of LG Semiconductor, which is now Hynix Semiconductor.
Creditors of Hynix including the Korea Exchange Bank (KEB) still hold a 15.9 percent stake in Hynix.
The banks are in the process of finding who they say is ``the right buyer’’ for the entire stake worth some 3 trillion won including a management premium.
The banks were controlling Hynix after getting shares in return for $4.6 billion that they had poured in to bail it out, after being hit by dropping chip sales in 2001.
``Again, what LG Electronics is now urgently tasked to do is to revive and bolster its presences in its existing businesses,’’ said Chung.
Shares of LG Electronics rose 4.7 percent to end at 102,500 won, according to the Korea Exchange (KRX).