(Updates with comment from analyst in fourth paragraph.)
Dec. 7 (Bloomberg) -- LG Chem Ltd. fell the most in more than six weeks in Seoul trading after Maeil Business newspaper reported South Korea’s largest chemical company would spin off its battery business in the first half of next year.
The stock declined as much as 7 percent to 323,500 won, the most since Oct. 20, and traded at 329,000 won as of 11:59 a.m. local time. The benchmark Kospi index gained 0.9 percent.
While the company has considered various options to boost its competitiveness and ensure independent management in the battery business, a decision for a spinoff hasn’t been taken, LG Chem said today in a regulatory filing.
“Some shareholders seem to be worried that the core asset is likely to be transferred to an affiliate when being spun off,” said Yoo Young Kook, an analyst at KTB Securities Co. in Seoul, who has a buy recommendation on LG Chem. “I assume such a possibility is very low, and the company’s comment shows a spin-off is unlikely soon.”
As part of a management reshuffle at LG Group units on Dec. 2, LG Display Co. Chief Executive Officer Kwon Young Soo was named to lead the chemicals company’s battery division. Kwon will head, as a president, the business that makes batteries for electric vehicles, mobile phones and notebook computers as well as energy storage systems.
LG Chem plans to spend 2 trillion won ($1.8 billion) by 2013 to expand its electric-car battery capacity, the company said in April. The company has signed supply accords with carmakers including Ford Motor Co. and Renault SA, and aims to capture 25 percent of the world’s electric-car battery market within four years, it said at the time.
--Editors: Indranil Ghosh, John Chacko
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