South Korea’s LG Energy Solution has agreed to divest factory building assets at its Ohio electric vehicle battery joint venture to Honda Development and Manufacturing of America.

In a transaction valued at Won4.22tn ($2.85bn) according to a regulatory filing, the deal covers the building and related infrastructure owned by subsidiary L-H Battery Company.

The deal excludes the land and production equipment.

LG Energy Solution said the move is aimed at improving operational efficiency within the joint venture.

Based on an exchange rate of Won1,478.90 to the US dollar at the contract date, the disposal equates to a converted value of $2.85bn.

The company noted that the final consideration could be revised following due diligence and any subsequent exchange-rate adjustments.

Completion of the deal is targeted for 28 February 2026.

The assets being sold account for roughly 7% of LG Energy Solution’s consolidated total assets, which stood at Won60.31tn at the end of 2024.

The Ohio facility forms part of a $4.4bn battery manufacturing joint venture announced in 2022 between Honda Motor and LG Energy Solution.

As reported by The Korea Herald, under the revised arrangement, the joint venture will continue operating at the site through a lease agreement, with no changes planned to production schedules or operational strategy.

The sale-and-leaseback structure is intended to reduce capital burdens by cutting construction-related costs.

It represents the largest portion of total investment, and to improve liquidity tied up in fixed assets amid a global slowdown in electric vehicle demand and the phasing out of US consumer EV subsidies.

Battery manufacturing at the Ohio plant is expected to begin next year to support Honda’s North American electric vehicle line-up, with provisions allowing for a potential expansion into energy storage system applications.

Earlier this month, LG Energy Solution disclosed in a regulatory filing that Ford Motor Company has notified it of the cancellation of their Won9.6tn battery supply agreement, which was signed in October last year.

The contract covered the supply of 109 GWh of nickel-cobalt-manganese (NCM) batteries from LG Energy Solution’s Polish plant between 2026 and 2032, intended primarily for use in Ford’s light commercial vehicles.