November 6, 2019 / 9:43 AM / 9 days ago

South Korea's LG picks Macquarie Asset as preferred bidder for stake in IT unit

SEOUL (Reuters) - South Korean conglomerate LG Corp said on Wednesday Macquarie Asset Management has been selected as the preferred bidder for a 35% stake it is selling in an IT services firm.

The sale could be worth 1 trillion won ($865 million), South Korean media reported, adding that the Macquarie Group Ltd (MQG.AX) unit beat U.S. private equity firm KKR & Co (KKR.N) for the stake and a binding deal is expected this month.

Macquarie Group’s Seoul office declined to comment.

The deal will enable LG Corp (003550.KS), controlled by LG Group Chairman Koo Kwang-mo and family members, to reduce its holding in LG CNS, a unit that offers system integration and consulting services, to below 50% from 84.95%.

That will likely allow the unit to escape potential regulatory scrutiny. South Korea’s antitrust regulator last year proposed tougher regulations for subsidiaries which are majority owned by chaebols.

As South Korea’s chaebols come under growing regulatory pressure amid widespread criticism that they benefit founding families at the expense of smaller businesses, they are putting up more non-core assets for sale.

LG Corp in September sold a 60.1% stake in a procurement arm to Affinity Equity Partners for 602 billion won.

Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Edwina Gibbs

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