LG is one of Korea's largest business groups. Westerners know the company mainly as LG Electronics, Korea's #2 electronics manufacturer, sitting some way behind the mighty Samsung. Yet the group has interests in numerous other sectors, especially in its domestic market where - perhaps surprisingly - LGH&H is the leading household and personal care marketer and Coca-Cola licensee, and the group has a finger in numerous other pies including telecoms, industrial manufacturing, textiles and property development. In fact, it is regarded by many as the model for modern Korean businesses, having undergone a painful restructuring from a labyrinthine "chaebol" to Western-style diversified conglomerate without the financial or political scandals which dogged several of its competitors, including Samsung. It was in fact the first of Korea's chaebol conglomerates to complete the transition to a modern holding company, eliminating the maze of cross-holdings between its different operating businesses to form a single linear structure. The restructuring process came to its conclusion in 2004 with the spin-off the various retail and services businesses into a separate entity, GS Holdings. As a result, LG Corporation is now focused on three areas of Chemicals (in their widest sense, including household and personal care products), Electronics and Telecommunications & Services, each of which in turn houses several operating companies. The largest of these are publicly quoted, but are controlled by holding company LG Corporation, in most cases through shareholdings of 30% to 35%. In Korea, LG U+ is a leading provider of broadband and mobile services, competing with local leaders KT and SK Telecom. Other important subsidiaries include general trading company LG International and clothing company LG Fashion. GIIR is the majority controlled marketing services division, part-owned by WPP; LG Sports owns the LG Twins baseball club and LG Sakers basketball team. Several other businesses have been divested including what was once a large financial services and credit card division. Like Samsung, the group is still firmly controlled by its founding family, in this case the brothers Koo Bon-Moo and Koo Bon-Joon, grandsons of the man who launched the business in the late 1940s making face cream and industrial chemicals. Group revenues were approx $142bn in 2018, with electronics contributing around 55% of the total.
Capsule checked 24th April 2019
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