April 15, 2021: A last-minute deal between Korean battery firms SK Innovation and LG Energy on April 11 has averted a 10-year import ban of SK Innovation batteries and subsequent pull-out of the firm from the US, news agency Bloomberg reported on April 12.
The two firms have been in a two-year intellectual property rights row, with LG Energy, a unit of LG Chem, accusing SK Innovation of stealing billions of dollars’ worth of crucial battery manufacturing information, increasing its competitiveness with major automakers Ford and Volkswagen.
SK Innovation has denied receiving or using any confidential information from any former LG Energy staff it has employed, says Bloomberg.
The argument led to the US International Trade Commission siding with LG and issuing a limited 10-year exclusion order, which prohibited SK Innovation’s lithium batteries from being imported into the US. However, it did allow for the ruling to be quashed if the two sides struck a deal or if US president Joe Biden intervened and overturned it.
Reuters news agency said SK Innovation then threatened to halt construction of a $2.6 billion battery plant in the state of Georgia on the basis that ‘the Commission’s orders destroy the economic viability of SK Innovation’s investment in battery production in Georgia and will rationally and inevitably lead to its abandonment’.
The deadline for an agreement or overturn to be reached was April 11, and at the 11th hour SK Innovation agreed to pay $1.8 billion to LG Energy in a deal that ‘should allow SK Innovation to reap the long-term benefit of EV proliferation in the US’, according to Morgan Stanley analyst Young Suk Shin, quoted by Bloomberg.
Both firms also agreed to withdraw all lawsuits lodged in South Korea and overseas, and not to undertake any legal action against each other for the next 10 years.