August 31, 2009 / 7:14 AM / 10 years ago

UPDATE 1-Hyundai Mobis, LG Chem to set up battery JV

* JV to produce lithium-ion battery packs for hybrid cars

* Hyundai Mobis shrs dive after Hyundai Motor shr deal (Adds details of deal, background, shares)

SEOUL, Aug 31 (Reuters) - South Korea’s Hyundai Mobis Co (012330.KS), the car-parts making unit of Hyundai Motor Group, said on Monday it plans to set up a battery joint venture with LG Chem (051910.KS).

Hyundai Mobis has signed a memorandum of understanding with LG Chem, the country’s No.1 chemicals company, for a venture which would develop and produce lithium-ion battery packs for hybrid cars, South Korea’s top car-parts maker said in a filing with the Korea Exchange.

Financial details of the deal were not disclosed.

In June, LG Chem said it would invest 1 trillion won in an electric car battery plant over the next four years. It aims to derive total revenue of 2 trillion won from the battery business in 2015. [ID:nSEO150729]

Its U.S. unit is also in a deal to supply next-generation lithium-ion batteries for General Motors’ [GM.UL] Volt plug-in.

Hyundai Motor Co (005380.KS) launched its first hybrid car in South Korea in July, starting sales of the Elantra LPI, a hybrid model of its popular compact sedan that uses liquefied petroleum gas (LPG) and lithium-ion polymer batteries. [ID:nSEO339458]

Hyundai is due to launch its first gasoline-electric hybrid, a version of the flagship Sonata in the latter half of 2010.

Another South Korean rechargeable battery maker, Samsung SDI Co (006400.KS), has teamed up with Germany’s Robert Bosch and operates a car battery venture called SB LiMotive. SB LiMotive is set to build a plant in South Korea to start producing car batteries in 2011.

Shares in Hyundai Mobis ended down 9.86 percent at 132,500 won, far underperforming a 1.0 percent fall in the wider market .KS11, after it announced on Friday it had bought Hyundai Motor shares worth 1.34 trillion won ($1.08 billion) from Hyundai Steel (004020.KS). [ID:nSEO241765]

LG Chem fell 1.05 percent to 188,500 won. (Reporting by Cheon Jong-woo; Editing by Muralikumar Anantharaman)

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