LG Corp. Cancels All Treasury Shares Worth 350 Billion Won... Strengthening Shareholder Returns

Newsis [Financial News] LG Corp. is stepping up its shareholder return policy by canceling all of its treasury shares worth approximately 350 billion won. Following the cancellation of half of its existing treasury shares last year, the company has decided to eliminate the remaining volume as well, demonstrating an acceleration in the implementation of its policy to enhance corporate value.
LG Corp. announced on the 22nd that it has decided to cancel all 3,029,581 common treasury shares acquired within the scope of distributable profits. 96% of the total issued common shares.
Based on the closing price on that day, the value of the treasury shares subject to cancellation is approximately 350 billion won. The planned cancellation amount is approximately 250 billion won, based on an accounting book value calculated at an average acquisition price of 82,520 won per share, and the cancellation is scheduled for the upcoming 28th. Share buybacks are a method of permanently eliminating a company's treasury stock, which reduces the number of outstanding shares and has the effect of increasing earnings per share (EPS).
Accordingly, it is considered a representative shareholder return policy, along with dividends. Previously, LG Corp. canceled half of its 6,059,161 treasury shares held last year.
Subsequently, the company signaled an additional shareholder return policy by announcing plans to cancel all remaining treasury shares within the first half of this year. LG Corp. plans to utilize a portion of surplus cash remaining after executing dividends and investment funds from one-time non-recurring profits and recurring profits as a source for share buybacks.
Policies to enhance corporate value are also being implemented sequentially. Last year, LG Corp. announced policies to enhance corporate value, including raising the dividend payout ratio and introducing interim dividends.
In fact, LG Corp. raised the minimum dividend payout ratio based on separately adjusted net profit from the existing 50% to 60% last year.
With a payout ratio of 68% last year, the company also met the requirements for separate taxation of dividend income for high-dividend companies. The average dividend payout ratio over the past five years (2021–2025) has also remained at around 69%.
In the long term, the company is also focusing on improving profitability. LG Corp.
plans to raise its consolidated Return on Equity (ROE) to the 8–10% level by 2027. To achieve this, LG intends to strengthen its foundation for future growth by expanding investments centered on the ABC (AI, Bio, and Clean Tech) sectors, which are considered the group's future growth engines.
Meanwhile, in accordance with the amended Restriction of Special Taxation Act, a special provision for separate taxation of dividend income for investors in high-dividend companies has been implemented starting this year. Companies that disclose a Value-up plan along with a dividend payout ratio above a certain level are subject to this provision.
Amidst this, LG has been disclosing group-level mid-to-long-term value-up plans since the end of last year and is concretizing measures such as share buybacks, raising the minimum dividend payout ratio, and a shareholder return roadmap. Park Jong-ryeol, an analyst at Heungkuk Securities, analyzed, "LG is making visible its preemptive plans to enhance corporate value, such as the complete buyback of treasury shares and raising the dividend payout ratio," adding, "It is expected that the holding company's supply and demand will improve and the stock price will be revalued through securing stable dividend income and expanding shareholder returns.
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Newsis [Financial News] LG Corp. is stepping up its shareholder return policy by canceling all of its treasury shares worth approximately 350 billion won. Following the cancellation of half of its existing treasury shares last year, the company has decided to eliminate the remaining volume as well, demonstrating an acceleration in the implementation of its policy to enhance corporate value.
moving@fnnews.com Lee Dong-hyeok Reporter