This image provided by LG Electronics Inc. on Dec. 23, 2020, shows a concept for a future vehicle using parts from LG and Magna International Inc. The two sides agreed to set up a joint venture to make auto parts including e-motors and inverters. (LG Electronics)
Shareholders of LG Electronics Inc. on Wednesday approved the company's plan to split off some of its electric vehicle (EV) components business to set up a joint venture (JV) with Canadian auto parts maker Magna International Inc.
The shareholders passed LG's proposal to carve out the EV powertrain business from its vehicle component solutions (VS) division to establish a new company with Magna.
LG will hold a 51 percent stake in the newly created firm, tentatively named LG Magna e-Powertrain Co., with the rest to be owned by Magna.
In December, the South Korean tech giant announced that it will form a joint venture with Magna, the world's No. 3 auto parts maker, to boost its competitiveness in the future mobility sector.
The joint venture, which will specialize in manufacturing electric car motors and parts such as inverters and board chargers, is scheduled to be launched in July.
Bae Doo-yong, LG's chief financial officer who chaired the shareholder meeting, said the company aims to achieve "quality growth" this year by expanding coverage of its main businesses, such as home appliances, and increase sales of premium products like OLED TVs.
Bae reiterated that the company is still reviewing various options for its money-losing smartphone business. In January, LG announced that its mobile communications division is open to every possibility, triggering speculation that the company may shut down or sell the unit.
Meanwhile, the shareholders also approved LG's new shareholder return program unveiled in January. LG will pay out 1,200 won ($1.06) per common share and 1,250 won per preferred share for the fiscal year of 2020. (Yonhap)
