Public Disclosure

11/18/2004

Public Disclosure on Other Major Management Issues

Notice of approval to merge the LG Electronics' business portion of LG-IBM Personal Computers into LG Electronics ('LGE'), in accordance with the Korean regulations on Small-scale Mergers

On November 17, 2004, LGE's Board of Directors approved a motion to merge the LGE business from the former Korean joint venture, LG-IBM Personal Computers Co., Ltd., ('LGIBM') into LGE from January 1, 2005.

Earlier, on November 1, 2004, LGE and IBM agreed to end their Korean joint venture, LGIBM. Consequently the joint venture was split into an LGE business and an IBM business. LGE's board has approved the proposal to merge the LGE business from LGIBM into LGE's personal computer division in accordance with the Small-scale Merger regulations in Article 527 : 3 of the Commercial Code.

In accordance with the regulations on Small-scale Mergers, shareholders of LGE who objected to the Small-scale Merger were invited to register their objections from November 2, 2004 through November 16, 2004. During this period, owners of 1,451,666 shares registered opposition to the Small-scale Merger, which corresponds to 0.93% of the outstanding shares of LGE. Since the number of objecting shares comes to less than 20% of LGE's total outstanding shares, LGE will proceed with the merger without convening a meeting of shareholders.

In accordance with LGE's rules governing meetings of the Board of Directors, a decision by the CEO has been substituted for a decision by the Board of Directors

For more detail on the merger, please refer to the following factsheet:

Detail: A standard value (base share price) for merger was computed for LGE in accordance with Article 84:7 of the Securities Exchange Law, and Article 36:12 of the Enforcement Ordinance to the same law. Then a standard value for merger (intrinsic value) was computed for the LGE Business of the unlisted LGIBM in accordance with Article 84:7 of the Enforcement Ordinance to the Securities Exchange Law, Article 36:12 of the Enforcement Regulations to the Securities Exchange Law, Article 82 of the Regulations on the Issue and Public Disclosure of Marketable Securities and Articles 5 through 9 of the Detailed Enforcement Regulations to the Regulations on the Issue and Public Disclosure of Marketable Securities

Calculations: Before the split and merger, LGIBM had issued a total of 4,860,000 shares and the LGE Business of LGIBM corresponded to 49% of LGIBM, or 2,381,000 shares

Prior to the split and merger, IBM Korea was the beneficial owner of 51% of the shares of LGIBM, so after the split, IBM Korea owns 51% of the shares of the LGE Business of LGIBM

Per-share valuation of LGE came to 63,200 KRW for LGE (5,000 KRW per share par value) and per share valuation of the LGE Business of LGIBM came to 6,442 KRW (5,000 KRW per share par value), which leads to a merger value of 1:0.1019363. This is not very different from the merger ratio of 1:0.1011390, calculated from the net asset value of the LGE Business of LGIBM at the time of the split and merger contract between the two parties LGE and IBM Korea. 1:0.1011390 is a smaller merger ratio than 1:0.1019363, so it is more beneficial for the minority share holders of LGE. Therefore we have decided that it is most appropriate to use 1:0.1011390 as the ratio of the merger of the LGE Business of LGIBM into LGE

Since the merger ratio (1:0.1011390) yields a total of 240,852 shares (the number of LGE shares which correspond to the LGE Business of LGIBM), LGE will issue 51% of this number - 122,834 shares- to IBM Korea in exchange for the portion of the LGE Business of LG IBM owned by IBM Korea. LGE will not issue 118,018 new shares for the remaining 49% of the LGE Business of LGIBM that is already owned by LGE

Shares Issued: LGE will issue 122,834 ordinary shares in exchange for the 51% portion of the LGE Business of LGIBM held by IBM Korea

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