LG Electronics and Canadian auto components manufacturer Magna International are in the final stages of establishing a new electric vehicle (EV) powertrain joint venture, according to reports in South Korea, citing an industry insider.
The joint venture was first announced at the end of last year with LG shareholders in March 2021 voting in favour of the deal which will give the South Korean electronics giant a 51% stake in the new company.
The two partners are currently in the process of selecting their respective board members for the new company, which is expected to be called LG Magna e-Powertrain Company.
LG is expected to appoint three members, including the chief executive officer (CEO) and Magna two, based on the agreed shareholder structure.
LG is scheduled to spin off its EV powertrain operations into the new company on 1 July with Magna set to acquire a 49% stake for US$453m on the same day.
LG Magna e-Powertrain Company is expected to expand rapidly thanks to the significant synergy expected to be generated between the two partners.
It is expected to generate a turnover of at least KRW500bn (US$441m) in 2021 with revenue forecast to grow by 50% between 2022 and 2025.
Two jointly owned subsidiaries have already been established for the new company, in Nanjing, China, and in Michigan, to strengthen its global supply chain.