The wide array of activities that LG conducts are now coordinated within four highly focused business sectors: Chemicals & Energy, Electronics & Telecommunications, Finance, and Services. Each sector has undergone systematic changes, with improved financial compositions, restructured business portfolios, and realigned equity investment structures.

LG aims to simplify its ownership and governance structure-eradicating complex multiple cross investments among affiliates-by placing affiliates under the control of a group holding company.

Under this structure, investments will be the holding company, allowing individual business units the freedom to manage their core interests without concern for the affiliates’ activities.

The first stage in this process, undertaken in 2001, was the division of LG Chemical into three entities: first, LGCI, the holding company, and further LG Chem and LG Household & Health Care. These latter two gained individual control of their business activities, while investment decisions transferred to the holding company. Having tested the viability of this system with the chemicals division, in April 2002, LG followed the same process to demerge LG Electronics into LGEI [holding company] and LG Electronics. This process will be brought to conclusion with the merger of LGCI and LGEI in 2003, thus completing LG’s transformation into a full holding company structure.