LG Chem embarks on sale of dermal filler business worth $343 million

LG Chem Ltd., the world’s fourth-largest chemicals producer that is fostering vaccine and new drug development as new growth drivers, has kicked off the sale of its cosmetics filler business in hopes of fetching more than 500 billion won ($343 million).

According to sources in the investment banking industry on Friday, LG Chem has commissioned HSBC to lead the sell-off process of its dermal filler business with a plan to invite potential buyers this month officially.  

The business, dubbed Aesthetic Division, mainly produces hyaluronic acid filler under the Yvoire brand and has recently made an inroad into Thailand with its skin-regenerating beauty brand Vitaran, accelerating the expansion of its presence in the global medical skin-care market.

The medical skin-care business under LG Chem’s Life Science unit reports about 100 billion won and 30 billion won in annual sales and earnings before interest, taxes, depreciation, and amortization (EBITDA), respectively.

LG Chem hopes to sell it for more than 500 billion won, according to sources.

PART OF BUSINESS RESTRUCTURING

The sale of the aesthetic business comes at a time when LG Chem has been seeking to reform its Life Science unit’s portfolio with more focus on vaccines and new drug development.

As part of the restructuring, the company sold off its vitro diagnostics business to Seoul-based Glenwood Private Equity in 2023.

Earlier in the same year, it purchased the US biotech firm AVEO Pharmaceuticals Inc. for 800 billion won to strengthen its anti-cancer drug portfolio and accelerate its foray into the US market.

With the proceeds from the sale of the aesthetic business, LG Chem is also expected to buy out more bio companies to bolster its Life Science unit.

The company, also Korea’s top chemicals maker, has been fostering the growth of the pharmaceutical business as one of its three growth pillars, alongside battery materials and eco-friendly materials.

The Life Science unit, however, accounted for a mere 2.6% of LG Chem’s total sales of 36.58 trillion won as of the third quarter of 2024.

Following the acquisition of AVEO, it unveiled its ambition to join the ranks of the world’s top 30 pharmaceutical companies.

It also vowed to invest 2 trillion won in research and development of new medicines between 2023 and 2027 and launch four new medicines for cancer and metabolic diseases by 2030.

Write to Da Eun Choi at max@hankyung.com
Sookyung Seo edited this article.