Feeds

LG, Hyundai go to the wire on DRAM merger

Arbitrators called in to determine fair price for LG assets

  • alert
  • submit to reddit

Top three mobile application threats

Surprise, surprise. Hyundai and LG Electronics have failed to meet their self- imposed Feb 20 deadline for agreeing a price for LG’s DRAM business. Now a six–strong group of arbitrators will come up with a fair price for LG’s semiconductor assets. IT will report back on February 28, enabling the deal to conclude on March 7, according to an unnamed panel member, quoted in the Korean Herald. The two companies say they will abide by the panel's decision. LG Electronics wants $3.4 billion for its assets. while Hyundai does not want to pay more than $900 million. It is in the interest of respective shareholders that LG gets the best price for its assets, while Hyundai pays as little as it can get away with. But this gap is ridiculous. The Korean government should have imposed an either- or clause on the negotiations. There is little love lost between the two companies, and LG resents the forced disposal of its DRAM business, under the Korean Government-imposed "realignment" of Chaebol operations. More sense would have been got out of the two companies if they had known that the panel would plump for either LG’s price or Hyundai. A “fair price” could factor in more than LG’s net asset valuation. But it is difficult to estimate the worth of LG withdrawal from the endemic over-capacity of the DRAM industry. We suspect that Hyundai’s valuation is the more realistic of the two -- never mind the book value of LG’s DRAM assets. There is not exactly a buyers market for DRAM plants right now… witness Siemens’ failure to find a buyer for its modern plant on Tyneside. Hyundai faces a huge bill for post-merger consolidation and it will find it very difficult to retain the combined market share held with LG pre-merger. LG uses different manufacturing technology, so it will take time for Hyundai to reap economies of scale. And, given Hyundai’s union-unfriendly reputation, the company faces tough times ahead with LG-inherited staff. ®

3 Big data security analytics techniques

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.