Report: LG Energy Solution IPO Highly Oversubscribed

It's the biggest IPO in South Korea, which will make LGES South Korea's third most-valuable company.

By: Mark Kane

Jan 14, 2022 at 9:10am ET

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LG Chem's LG Energy Solution (LGES) IPO is heading towards a successful listing on the Korea Exchange (KRX) on January 27, 2022 as the country's biggest IPO ever.

Reuters reports that the company attracted tremendous interest for shares priced at 300,000 won each - the maximum out of the 257,000-300,000 won range announced in 2021 - which will enable it to raise 12.8 trillion won ($10.76 billion) for 42.5 million shares or about 18.2% of the company.

"South Korean battery maker LG Energy Solution (LGES) raised $10.8 billion in its initial public offering (IPO), attracting record demand for a deal in South Korea, the company said on Friday.

LGES shares were priced at 300,000 won each, at the top of a range announced in a regulatory filing last month, raising 12.8 trillion won ($10.76 billion)."

LG Chem is expected to maintain 81.8% of LGES, valuated at 70.2 trillion won (over $59 billion). Once listed, LGES will become the third most valuable company in South Korea.

LG Chem's LG Energy Solution expressed an expectation that it will overtake CATL as the world's largest EV battery manufacturer.

The company already supplies batteries to a large number of electric car manufacturers, including Tesla, Volkswagen Group, General Motors and dozens more.

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Soon, we might hear about another battery IPO in South Korea, as SK Innovation's SK On battery business (a new spin-off) most likely will follow LGES. The company set a target to be the largest EV battery manufacturer with an output of over 500 GWh by 2030.

Together with China's CATL, and at least several other contenders, the battery race heats up. The battery market actually expands faster than the electric vehicle market, because not only is the number of EV increasing, but also their average battery capacity.