LG Electronics Spins Off Powertrain Business from VS Division
(Tentative Name) LG Magna e-Train to Launch Next July
Expanding sales channels by securing Magna's customer network


On the 23rd, LG Electronics decided to establish a joint venture in the electric vehicle (EV) powertrain sector with Magna International of Canada, the world's third-largest automotive parts supplier by revenue.

Considering the rapid global trend toward automotive electrification, both companies pursued this collaboration to establish a mass production system early and enhance business competitiveness and growth potential.

LG Electronics resolved at an extraordinary board meeting on the 23rd to spin off a portion of the green business within the VS Business Division and establish a joint venture.

LG Electronics, the spin-off company, will hold 100% of the shares of the newly established company through a spin-off, and Magna will acquire 49% of the shares of the newly established company. The acquisition amount is $453 million (approximately 501.6 billion KRW).

If approval for the spin-off and the establishment of a joint venture is granted at the general shareholders' meeting scheduled for next March, the tentatively named 'LG Magna e-Powertrain' is expected to officially launch around July.

The headquarters is located in Incheon, South Korea, and about 1,000 employees involved in some of the green business are scheduled to move to the joint venture. The green business being spun off includes motors, inverters, and vehicle chargers for electric vehicles, as well as drive systems (products in which motors, inverters, and reduction gears are modularized).

Magna possesses engineering capabilities in the powertrain sector, including integrated system design and verification, as well as extensive business experience and a global customer network. LG Electronics has the technological prowess and manufacturing competitiveness for key electric vehicle powertrain components such as motors and inverters.

Both companies anticipated that their respective strengths would create synergy and contribute to the advancement of the joint venture's business. Furthermore, the joint venture is expected to secure new orders from Magna as well as its clients, enabling it to establish a mass production system early and realize economies of scale.

◇ LG Electronics Completes Three Pillars of Automotive Parts Business

LG Electronics established the Vehicle Components Solutions (VS) business division in 2013. In August 2018, it acquired ZKW, an Austrian company that is the world's fifth-largest automotive headlamp manufacturer by production volume. At the end of 2019, LG Electronics transferred and integrated the automotive lamp business within the VS business division to ZKW.

With the launch of this joint venture, LG Electronics will pursue its automotive parts business along three axes: the VS Business Division (infotainment), ZKW (lamps), and LG Magna e-Powertrain (powertrains). The performance of all of these will be combined with the consolidated revenue and operating profit of the VS Business Division.