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LG Electronics announced that its board approved an agreement to exchange LG Electronics' printed circuit board (PCB) division with it affiliate LG Micron's plasma rear panel (PRP) division. The restructuring agreement improves efficiency and raises equity for both companies.
According to the agreement, the transfer and acquisition will take place on May 1, 2008, and will include assets, liabilities, and human resources. However, accounts receivable, accounts payable, as well as some real estate like land and buildings will be excluded.
LG Electronics decided to pursue the agreement based on the enhanced efficiency, cost effectiveness, and overall competitiveness brought about by producing both plasma display panels and plasma rear panels together. Meanwhile, LG Micron will be able to boost efficiency of producing the components in which it specializes, by acquiring LG Electronics’ printed circuit board division.
LG Electronics is the largest stockholder of LG Micron. The agreement will increase LG Electronics’ stake from 36% to 55%.
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