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LG gets Zenith; Korean company wraps up the deal.

Chicago--In a deal that was initiated in July, LG Electronics Inc. has acquired controlling interest of Zenith Electronics Corp.

Zenith stockholders approved LGE's $351 million stock purchase agreement at a special meeting here last Tuesday, and final transactions were completed the next day. Korean-owned LGE, formerly Goldstar Co. Ltd., now owns 57.7 percent of Zenith's outstanding shares. The 77-year-old Zenith was the last U.S.-owned TV manufacturer.

Under the transaction, Zenith stockholders approved the sale of 16.5 million newly issued shares of Zenith common stock at $10 per share to LGE, and a tender offer under which LGE will purchase 18.6 million shares from Zenith stockholders at $10 per share.

Zenith and LGE will continue to function as separate companies with their own sales, marketing and manufacturing forces. Zenith will continue to have its stock traded on the New York Stock Exchange.

At the time the deal was revealed last summer industry analyst Clark Johnston of NDP Group Inc. called the buyout a good deal for both companies. He said LGE is getting a brand with a tremendous impact in the U.S. market and Zenith will no longer have to worry about its financial problems.

LGE has elected six directors to Zenith's 10-person board. H.J. Lee, LGE chairman, is now Zenith's chairman, succeeding Jerry K. Pearlman who retired Nov. 8. In February Pearlman said he will retire in the fourth-quarter.

Zenith officials have stated they plan to use most of the $165 million of LGE's invested capital to improve its color-picture-tube production for TVs 27 inches and up, and to support its network cable business.

Following the deal, Albin F. Moschner, who will continue as Zenith's president and CEO, said: "We are entering an exciting new chapter in our history, one that promises a stronger, much more competitive Zenith, thanks to our new partnership with LG Electronics."

John Koo, president of the LG Electronics and newly appointed chairman of the executive committee of Zenith's board of directors, said the alliance with Zenith will "capitalize on the complementary brand positions of Zenith and Goldstar." Goldstar is LGE's brand.
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Title Annotation:LG Electronics, Zenith Electronics
Author:Bloomfield, Judy
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Article Type:Brief Article
Date:Nov 13, 1995
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