FTC approves establishment of joint venture between LS and L&F

LS Group Chairman Koo Ja-eun, center, poses with key executives from the company after taking part in the tape-cutting ceremony at the nickel sulfate plant completion ceremony held in Asan, South Chungcheong Province in March. Courtesy of LS Group

By Kim Hyun-bin

The Fair Trade Commission (FTC) has approved the establishment of a joint venture between LS, which produces the core material of secondary batteries and L&F. The joint venture is tentatively named LS L&F Battery Solution.

The FTC analyzed that this joint venture will lead to a vertical integration of raw materials between LS, L&F and the subsidiary company of LSMnM, which supplies raw materials for the production of cathodes.

LS Tower in Seoul / Korea Times file

The joint venture company will receive the raw materials of nickel sulfate and cobalt sulfate from LSMnM, an affiliate of LS, and produce cathodes.

L&F will then use the cathodes produced by the subsidiary company to manufacture anode materials and supply them to lithium-ion battery manufacturers.

The FTC determined that in the global cathode market and raw material market, there are no monopoly concerns. The subsidiary company needs to secure raw materials from sources other than LSMnM and a significant portion of transactions in the lithium-ion battery raw material market are needed via vertical integration, which contributed to the approval of the joint venture.

Both LS and L&F stated that they will establish a value chain for the secondary battery industry centered on the joint venture. The joint venture will be located in the Saemangeum National Industrial Complex in North Jeolla Province.

"Similar merger notifications have also been submitted in countries like China, Poland and Vietnam but the approval decision was made promptly ahead of other nations," an FTC official said.