Koo Bon-moo, the chairman of South Korea’s fourth-largest conglomerate who transformed a local producer of cheap appliances into a global tech and chemical powerhouse over two decades, has died. He was 73.
Koo died Sunday at 9:52 a.m. Seoul time as he opted not to be on life support after being ill for over a year, according to LG Group in an emailed statement.
The patriarch is expected to be succeeded by his adopted son, Koo Kwang-mo, 40, who was nominated to the board of LG Corp. on Thursday pending the approval of shareholders on June 29. Chairman Koo underwent multiple brain surgeries in recent years, Yonhap News Agency reported earlier.
In the 23 years since Koo was chairman, total sales at LG Group increased more than five times to 160 trillion won ($148 billion) in 2017 from 30 trillion won in late 1994. Overseas sales jumped tenfold to 110 trillion won in the same period.
“Chairman Koo is the one who built the foundation of LG’s global businesses, which span batteries to OLED panels and telecom,” said Park Ju-gun, president at corporate research firm CEOScore.
Under Koo, the South Korean home-appliance maker, which produced its first radio in 1959, became one of the world’s top five phone brands and its LCD business has been neck and neck with that of Samsung Electronics Co. Koo entered the telecom business in the late 1990s and also moved into car batteries and energy in search of new revenue.
LG Chem Ltd. has grown into a leading car-battery maker, supplying to such automakers as Ford Motor Co. and Renault SA. In 2015, LG Electronics Inc.struck a deal to co-develop General Motors Co.’s Bolt electric vehicle.
Koo was the third generation of his family to run the conglomerate, known locally as the chaebol, or “wealth clique,” after taking over the helm from his father in 1995. Koo adopted the holding company structure in 2003 and the group was later divided into four smaller parts, with Koo keeping the electronics, chemical and telecommunications businesses.
LG Corp. shares fell 0.3 percent and LG Chem shares dropped 1 percent as of 10:25 a.m. in Seoul trading. LG Electronics shares gained 0.3 percent.
Koo was the oldest grandson of LG Group’s co-founder Koo In-hwoi, who set up Lak Hui Chemical Industrial Corp. and started making cosmetics before expanding into plastics and household products such as toothpaste.
He is survived by his wife, son Kwang-mo and two daughters. The son was adopted in 2004 from the older Koo’s younger brother Koo Bon-neung, chairman of Heesung Group.
“There seems almost no risk in LG’s succession plan as the group appointed a successor early and the Koo family has the largest stake in the holding company,” said Park. “LG’s heir is likely to take the role of a board chairman and let professional management executives lead the businesses.”
As of March 31, Koo family members and LG’s two charity foundations held 46.7 percent of shares in LG Corp., the holding company of LG Group.
The younger Koo joined the group’s LG Electronics unit in 2006 and is currently a vice president at the information displays operations. He’s been involved in multiple businesses such as appliances, home entertainment, and group strategy, according to LG.
LG ranks as the fourth-largest among the nation’s family-run conglomerates with 123 trillion won of assets across 70 affiliates. Many of the nation’s chaebol, including Samsung Group, are undergoing a once-in-a-generation transition of power as their leaders age. But those succession plans haven’t always gone smoothly as they face increasing opposition from activist investors such as billionaire Paul Singer’s Elliott Management Corp.
“The funeral will be quiet and simple, like he and his family had wanted, and we’ve decided that it will not be public,” LG said in its statement. – Bloomberg