A proposed merger between LG Semicon and Hyundai to create a single powerful semiconductor firm looks set to fall apart this week, despite the appointment of a US company to broker an agreement.
Lee Hun-jai, chairman of the Financial Supervisory Commission (FSC), is quoted today in two local newspapers as saying that both LG Semicon and Hyundai are insisting they can go it alone in the market.
But that is likely to irritate South Korean president Kim Dae-jung, who has insisted that the two chaebols (family firms) get that particular act together.
Mr Lee is reported as saying that the "widely different corporate cultures" of the companies would prevent the integration of their semiconductor business and blamed LG for dragging its feet on the merger.
Hyundai, on the other hand, had supported Wall Street consultancy Arthur D. Little on its plans, Lee is reported as saying. The two could face financial penalties from the government for their recalcitrance.
Meanwhile, LG Electronics in the UK is expected to announce its plans for a restructuring during the course of this week, as reported here earlier.
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