Benzinga | Jan 10, 2022 01:46PM EST

Tesla Battery Supplier LG Energy Eyes $11B IPO: What You Need to Know

South Korea's LG Energy Solutions, which supplies EV batteries to the likes of Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:FM) and Volkswagen AG (PNK: VWAGY), is reportedly gearing up for a massive initial public offering.

What Happened: LG Energy is planning to offer 34 million shares at an estimated price range of 257,000 Won to 300,000 Won ($214 to $250), the Financial Times reports.

The company is now a wholly-owned subsidiary of South Korean chemical company LG Chem.

At the high-end of the estimated price range, LG Energy is valued at 70.2 trillion Won ($58.5 billion), which would make it the third most-valued South Korean company after Samsung Electronics and SK Hynix, the report added.

Trading of the company's shares will likely begin on Jan. 27, 2022.

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Why It's Important: LG Energy is the second-ranked global battery manufacturer after China's CATL. The South Korean company had a market share of 22% in the 11-months ending November 2021 compared to 29% for CATL, according to SNE Research.

The company is reportedly planning to invest 8.85 trillion Won ($7.3 billion) into its battery plants in South Korea, Poland, the U.S. and China by 2025 tripling its battery production capacity to 400 Giga-watt hours. The public listing is likely to provide the company the wherewithal to pursue its ambitious capacity expansion plan.

LG's nickel-based batteries are pricier than lithium-iron phosphate batteries manufactured by its Chinese rivals.

The company also faces headline risks stemming from the recall of EVs from General Motors Corporation (NYSE:GM) and Hyundai Motor Company (PNK: HYMTF) powered by its batteries.

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