LG Chem
LG Chem severed its $60B battery unit via branch abscission, creating specialized mutualists that trade $3B+ annually in materials.
LG Chem executed the rarest corporate maneuver in 2020: surgical amputation of its most valuable limb. The company spun off LG Energy Solution—its battery division generating 40% of revenue—into an independent entity now worth $60 billion. This is branch abscission, the biological process where trees sever limbs to redirect nutrients to higher-value growth. Most companies hoard their best assets. LG Chem cut one loose because the chemical parent and battery offspring had diverging metabolic needs. Chemicals require steady capital allocation across petrochemicals, advanced materials, and life sciences. Batteries demanded explosive investment to scale EV production. Forcing them to share resources would starve both.
The numbers validate the surgery. LG Energy Solution's 2024 revenue hit KRW 25.6 trillion with operating margins rebounding to 2.2% despite brutal EV market corrections. Meanwhile, the parent LG Chem targets KRW 26.5 trillion in 2025 revenue, focused on high-margin specialty chemicals and battery materials for the separated battery business. This creates a mutualistic loop: LG Chem supplies cathode materials and separators to LG Energy Solution, generating $3+ billion annually while maintaining strategic influence without operational burden. The parent specializes in molecular engineering; the offspring in gigafactory scaling. Each optimizes for different competitive pressures.
What makes this fascinating biologically: the separated entities remain metabolically linked. LG Chem's advanced materials division exists primarily to feed LG Energy Solution's appetite for battery components. This is modular specialization—distinct organisms evolved for symbiotic interdependence. Compare this to Samsung, which keeps batteries, chemicals, and electronics under one conglomerate umbrella, forcing capital allocation committees to referee between businesses with incompatible growth cadences. LG Chem's split recognized a fundamental truth: sometimes the healthiest thing for an ecosystem is to let specialized organisms emerge from a generalist ancestor. The 2020 spin-off wasn't divestiture. It was speciation.