Monday, November 26, 2007

[The Chosun Ilbo, November 21 2007] LG's U.S. Subsidiary Proves Golden Goose After All

LG Electronic’s U.S. subsidiary Zenith, which has been held up as an example of a failed takeover for a decade, is now earning handsome profits for its parent company in Korea. In 1995, LG Electronics acquired the TV maker for US$500 million to advance into the North American market. But Zenith initially proved a drag for LG because the electronic manufacturer went into the red, losing out in competition with Japanese firms.

Now the tide has turned. According to a senior LG Electronics executive, Zenith is now making handsome profits on the back of the digital TV boom in North America. Zenith owns a source technology dubbed VSB which is essential for making digital TVs in North America, and manufacturers must pay US$5 per TV to Zenith for using the technology.

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