LG Chem buys full stake in U.S. auto sealant maker Uniseal

South Korea’s leading chemical and secondary battery maker LG Chem Ltd. acquired a full stake in U.S. automotive adhesive maker Uniseal from its parent company Koch Enterprises to strengthen its automotive part network in the age of new mobility requiring ultra-light vehicles running on electric power.

Although the company did not disclose the sale price, market experts estimated the sale value would reach around 150 billion won ($132.9 million).

On Wednesday, shares of LG Chem rose 0.73 percent to close at 343,500 won.

Founded in 1960, Uniseal was recently picked as one of the top 25 adhesive companies by Adhesives & Sealants Industry (ASI) magazine. The Indiana-based firm that supplies its products to U.S. finished carmakers including GM and Ford recorded 63 billion won in sales last year.

Demand for automotive adhesives is rising rapidly in the global market as the auto industry is moving away from welds, rivets and other mechanical fasteners to make vehicles lighter and more efficient. The global auto sealant market is estimated to grow from 5.1 trillion won last year to 6.5 trillion won by 2020 and 8.4 trillion won by 2023.

LG Chem has added auto adhesives to its product portfolio through the acquisition. The company produces auto batteries, cathode materials, acrylonitrile butadiene styrene (ABS) and adhesive tapes for electric vehicles. “The takeover will help us to enter the auto sealant market and start new business of producing high-performing adhesive materials based on our technology,” said an official from the company.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]