April 01, 2026 [Seoul Economic Daily]- Lotte Chemical (011170.KS) will spin off its Daesan plant operations through a physical split to establish a new entity tentatively named Lotte Chemical Daesan Petrochemical Co.

The move is part of the government-approved “Petrochemical Industry Restructuring Project No. 1,” aimed at an eventual merger with HD Hyundai Chemical (Hyundai Chemical).

Lotte Chemical disclosed the plan on Monday through a “major event report (corporate split decision)” regulatory filing. The split is scheduled for June 1, and the new entity will be established as an unlisted company.

“Following this split, we plan to pursue a merger between the newly established spin-off company and HD Hyundai Chemical Co.,” Lotte Chemical said. “Through this, we aim to strengthen vertical integration from raw material procurement to final product manufacturing, and to enhance operational efficiency by building an integrated production system.”

The new entity will be absorbed into Hyundai Chemical, with Lotte Chemical receiving newly issued shares of Hyundai Chemical as consideration for the merger.

Ultimately, the structure will be reorganized so that Lotte Chemical and HD Hyundai Oilbank each hold an equal 50% stake in the surviving merged entity, Hyundai Chemical. Both sides plan to invest approximately 600 billion won ($440 million) each in the combined entity.

The restructuring aims to finalize the merger agreement by June and complete the merger by September this year.

Meanwhile, the government is pursuing a financial and tax support package totaling 2.1 trillion won ($1.5 billion), including new funding and perpetual bond conversions, to facilitate the swift execution of this Daesan No. 1 project.