Press Release

HYUNDAI AND LG SIGN DEFINITIVE AGREEMENT ON ACQUISITION OF LG SEMICON BY HYUNDAI ELECTRONICS INDUSTRIES

By May 20, 1999 December 9th, 2019 No Comments

Seoul, May 20, 1999 – Hyundai Electronics Industries Co., Limited (“Hyundai Electronics”) (KSE: 0066) and The LG / Executive office for Corporate Restructuring announced today a definitive agreement for Hyundai Electronics to purchase the 59% of the common shares of LG Semicon Co., Limited (“LG Semicon”) (KSE:2989) owned by companies and individuals affiliated with the LG Group for total cash consideration of KRW 2,560 billion. The transaction will strengthen the production and research and development capabilities of Hyundai Electronics in the manufacture of DRAM and other semiconductors, Hyundai expects to commence integration of the two companies in the 4th quarter of 1999. The combined company would be a leading global manufacturer of dynamic random access memory (“DRAM”) chips in the world, with an estimated total capacity of 620 million 64M DRAM equivalent units in 1999. After the closing of the transaction, LG Semicon will maintain certain sales and purchase relationships with LG Group companies. The definitive agreement follows the menorandum of understanding signed between the two companies on April 20, 1999. Under the terms of the agreement, Hyundai Electronics will purchase the 91,223,594 shares in LG Semicon currently owned by LG Group companies and affiliates. The purchase price consist of : (i) KRW 250 billion paid today; (ii) KRW 250 billion to be paid by Hyundai by May 27, 1999; (iii) KRW 1,060 billion to be paid on July 5, 1999; and (iv) promissory notes from Hyundai Electronics to LG for the remaining KRW 1,000 billion upon closing. These notes will be paid in five equal installments of KRW 200 billion every six months commencing June 30, 2000 and ending June 30, 2002. The transaction will be completed upon the receipt of regulatory consents in the United States, Europe and other required jurisdictions, which are expected during the summer of 1999. “This transaction allows us to cement our leading position in the DRAM market while helping to further bring about much-needed consolidation in the DRAM industry both domestically and globally,” remarked Mr. Young Hwan Kim, President of Hyundai Electronics Industries. “We anticipate strong synergies from the combination of our complementary strengths that will allow us to not only improve our business performance but also provide better products and solutions for our customers worldwide.” Mr. Yu Sig Kang, President of the LG/Executive Office for Corporate Restructuring said, “We are very proud of LG Semicon and everything it has achieved in its short history. We wish the employees of LG Semicon continued success in the memory industry. As for LG, we have earmarked the proceeds of the divestiture to debt reduction as well as investment in our core businesses of telecommunications and advanced electronics.” Hyundai Electronics, a core member of the Hyundai Group, is one of Korea’s largest manufacturers of semiconductors, information systems and electronic components. For the year ended December 31, 1998, Hyundai Electronics had KRW 8,800 billion in total revenues (consolidated). Hyundai Electronics’ operations are divided into the following groups: the Semiconductor Group, the Telecommunications Group and the Display Devices & Electronics Components Group. Hyundai Electronics has 18 overseas subsidiaries located in the United States, the People’s Republic of China (the “PRC”) and elsewhere in Asia and Europe. LG Semicon Co., Limited is one of Korea’s largest manufacturers of semiconductors. For the year ended December 31, 1998, LG Semicon had KRW 4,297 billion in total revenues (consolidated). Hyundai Electronics was advised by Merrill Lynch and Morgan Stanley Dean Witter, while LG was advised by Goldman Sachs and Lehman Brothers.