LG H&H divests Haitai beverage for USD 218M to fuel k-beauty expansion
This sale marks a significant pivot in LG H&H’s corporate strategy, signaling a clear prioritization of its cosmetics business over diversified consumer goods.
SOUTH KOREA – LG Household & Health Care (LG H&H) is doubling down on its K-beauty roots by selling its beverage subsidiary, Haitai, for KRW 300 billion (USD 218 million), a strategic move to streamline operations and redirect capital toward its core personal care and cosmetics business.
The divestment reflects LG H&H’s broader corporate strategy to shed non-core operations and concentrate resources on strengthening its beauty portfolio against rising competitors in the Korean cosmetics market.
By exiting the beverage segment, the company aims to enhance its competitiveness in the high-growth K-beauty sector, where it faces intensifying competition from emerging brands such as APR and Goodai Global.
Haitai htb, known for popular fruit-based beverage brands including Galamandeun Bae (pear juice), Podo Bongbong (grape drink), and Coco Palm (coconut water), generated KRW 374.1 billion (USD 288 million) in revenue last year.
Despite this substantial sales figure, the subsidiary posted an operating loss of KRW 10.1 billion (USD 7.8 million), making it a logical candidate for divestiture.
The beverage division’s declining profitability contrasts with LG H&H’s cosmetics segment, which has shown stronger growth potential. In 2024 alone, Haitai’s operating profit plummeted 74% year-over-year, dropping to just KRW 3.6 billion from KRW 14 billion the previous year.
Proceeds from the Haitai sale are expected to fund future investments and acquisitions in the beauty sector, positioning LG H&H to reclaim its status as a leading Korean cosmetics powerhouse.
The company is actively pursuing additional mergers and acquisitions in the beauty space following the completion of this divestiture.
The capital injection will support both organic growth initiatives and strategic M&A activities, enabling LG H&H to expand its product portfolio, enhance R&D capabilities, and strengthen market presence against domestic and international K-beauty competitors.
LG H&H originally acquired Haitai Beverage in 2010 from Asahi Breweries and other shareholders, eventually taking full ownership and renaming it Haitai htb in 2016.
The acquisition was initially intended to diversify LG’s portfolio beyond Coca-Cola distribution into the broader food and beverage market alongside its cosmetics and household goods businesses.
Since then, Haitai expanded its product line to include brands such as Sunkist and Coco Palm, but declining profitability ultimately prompted the decision to sell.
The company has already begun sending teaser letters to potential buyers and appears more focused on closing the deal quickly than maximizing the sale price, with a target price of around KRW 300 billion.
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