LX Group started to acquire MagnaChip Semiconductor, a system semiconductor company.
According to the business world on the 26th, LX Group started to review the acquisition of MagnaChip Semiconductor, which was on sale. It reversed the position that had previously stated that it was “not true” about the acquisition of Magnachip Semiconductor.
LX Group already has LX Semicon, a semiconductor design company, as an affiliate. For this reason, it is reported that the company is maximizing synergy through the acquisition of MagnaChip Semiconductor, which operates in the same industry.
The problem is acquisition funds. LX Semicon has a total liquidity of KRW 600 billion, including KRW 135.6 billion in cash and cash equivalents and KRW 470 billion in short-term financial products. To acquire MagnaChip Semiconductor, more than 1 trillion won is required. For this reason, it is true that the LX Group raises questions about the need for funds. LX International, a cash cow of LX Group, spent 600 billion won on the acquisition of Korea Glass Industries (Hanglas), and 95 billion won on the acquisition of a 63.3% stake in Poseung Green Power. There are concerns at the group level about the group’s financial structure following successive acquisitions.
There is also a question as to whether the current system semiconductor boom will continue. Accordingly, concerns are growing over the risk of overwriting the corporate value due to the need for the sale of foreign institutional investors, the major shareholders of MagnaChip Semiconductor, and LX Group’s desire to provide future food.
For this reason, LX Group is considering ways to lower the risk of acquisition by attracting private equity funds (PEFs).
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