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To: DJBEINO who wrote (3884)	9/2/1998 10:32:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

09-03-98 Hyundai, LG Sharply Split on Chip Restructuring Last-minute attempts to resolve conflicts among Korea's Big Five business groups failed yesterday, possibly postponing until today the scheduled announcement of an agreement on the restructuring of seven business sectors, sources said yesterday. The five chaebols _ Hyundai, Samsung, Daewoo, LG and SK _ have wrapped up deals in five major industries. But sharp differences in two others, particularly surrounding the semiconductor business between Hyundai and LG, have not yet been ironed out, said an official at the Federation of Korean Industries, a chaebol lobbying group. Massive industrial restructuring, or ''big deals,'' were expected to include plans to establish joint firms or consortiums among the Big Five in at least five industries _ petrochemicals, rolling-stock, aerospace, ship engines, and oil refining, the sources said. But it is unclear whether the restructuring of semiconductor and power-generation equipment makers will be included in the finalized big deal plans because of sharply conflicting interests among the concerned firms, they said. ''Otherwise, the five biggest chaebols would have planned to publicize their big deal restructuring plans yesterday,'' the FKI official said. Officials close to the talks said that the Big Five groups are determined to consolidate three chip makers into two players by merging LG Semicon and Hyundai Electronics Industries Co. But Hyundai and LG are split over who will hold the controlling stake in the merged semiconductor company, delaying the overall big deal settlements, the officials said. Hyundai refused to give up its plan to absorb LG Semicon, citing greater turnover volumes. Meanwhile, LG is maintaining its position that it will specialize in the electronics sector through continued involvement in semiconductor manufacturing, vowing not to yield beyond the joint management of a unified Hyundai-LG chipmaking firm. Chung Sang-kuk, a spokesman for LG Group, said, ''LG has no intention of giving up managerial control of a united chipmaking company to Hyundai.'' Hyundai Group spokesmen declined to comment on the issue. In the power-generation equipment industry, as well, Hyundai Group strongly opposed tentative plans to merge three domestic players into the soon-to-be-privatized Korea Heavy Industries and Construction Co., or HANJUNG. Due to sharply conflicting interests in the semiconductor and power equipment sectors, one or both of the two industries may not be included in the final big-deal programs, industry sources said. Meanwhile, in the petrochemicals sector, the Big Five agreed to create two independent management firms in Ulsan and Yeochon of South Cholla Province. In the cases of train coach and aerospace producers, the top chaebols also decided to establish two single consortiums. In the oil refining industry, Hyundai Oil Co. is likely to take over the oil-refining division of Hanwha Energy Co. But automakers were excluded from the initial stage of the big deals because of the cancellation of the international auction for Kia Motors Corp.