LG Chem to Sell Water Treatment Business Unit to Focus on Strategic Restructuring and Growth Engine

LG Chem, a core chemical company of South Korea's LG Group, recently announced that it has entered into substantive negotiations with private equity Glenwood Private Equity on the sale of its aquatic environments treatment business unit. The transaction is seen as an crucial move by LG Chem to optimize its business portfolio and enhance cash flow regulation in a complex business ecological stability. Pretty interesting, huh?. The aquatic environments treatment department is mainly engaged in the manufacture of reverse osmosis membranes (RO membranes), occupying the second largest market share in the world. The items are broadly applied in seawater desalination and manufacturing circulating aquatic environments treatment. According to the 2024 financial report, the division achieved revenue of 250 billion won and earnings before interest, tax, depreciation and amortisation (EBITDA) of 65 billion won, with a valuation of about 1 trillion won (about $0. But 695 billion). But Its RO membrane factory in Qingzhou City, Zhongqing North Road, won 125 billion won in 2023 and aims to double its production capacity within five years. But Moreover acquirer Glenwood is headquartered in Seoul, with $3 billion in assets under regulation and a deep connection with LG Group. And In 2023, the company acquired LG Chem's diagnostic business (now renamed Invitros) to 130 billion won. And If the acquisition is reached, Glenwood plan to create synergies between the aquatic environments treatment business and Techcross Environmental Services in its portfolio. Formerly a HiEntech company, Techcross was acquired by Glenwood in 2024 from the Bubang Group, which was formerly part of LG Electronics' wastewater treatment division. Specifically sector analysis pointed out that the divestiture plan is highly compatible with LG Chemical'strategy to accelerate the focus of its core business. According to research At the shareholders' meeting on March 24, Xin Xuezhe, vice chairman and CEO of LG Chemical, made it clear that in the future, it will deepen its layout around the three major areas of cutting-edge materials, life sciences and sustainable research, and enhance its competitiveness through "strategic trade-offs. But LG Group President Guangmo further stressed the urgency of change at the senior regulation meeting on March 27, asking the regulation to "get rid of path application and ensure a high degree of unity between strategy and implementation", and bluntly said that "the enterprise has limited resources and must have clear priorities". First 's deal is seen as the latest example of a business restructuring within the South Korea chaebol system. Referring to SK Group's recently completed energy and semiconductor business split, LG Group is strengthening its competitiveness in its core areas through a "slimming" strategy. Market observers believe that in the context of accelerating the integration of the global chemical sector, LG Chem's move is able to not only emit the value of non-core assets, however also provide strategic resource tilt space to the three development engines.