LG Electronics and Magna International have officially signed a transaction agreement to establish the pair's joint venture that was first announced in December last year.
The new company, called LG Magna e-Powertrain, will be based in Incheon, South Korea, and have an initial workforce of more than 1,000 people.
The new joint venture was first formed as a wholly-owned LG subsidiary on July 1. Magna then acquired a 49% stake in the company on Wednesday for $453 million, the companies explained.
The pair are hoping the joint venture will combine Magna's strength in electric powertrain systems and LG's expertise in components, such as e-motors and inverters, to expand their presence in the global electric car market. The joint venture will manufacture e-motors, inverters, and on-board chargers. It will also supply components related to e-drive systems.
Structurally, the joint venture will run two subsidiaries: One based in Nanjing, China and another in Michigan, US.
"LG Magna e-Powertrain is expected to enable both companies to quickly react to market trends and capitalize on the growing global shift toward vehicle electrification," LG and Magna said.
The companies also introduced the management team for the new firm when making the announcement. The CEO of LG Magne e-Powertrain will be Cheong Won-suk, who was most recently one of the heads for LG's vehicle component solutions business unit. Cheong is a 20-year LG veteran and spent a decade at Daewoo Motors R&D prior to joining the company.
Magna's Javier Perez, meanwhile, will become the COO of the new company, the pair said. Perez has almost 25 years of experience in automotive manufacturing and quality control, with 18 of those years being in Asia, they added.
LG's vehicle component business will still continue to offer infotainment solutions, the company said. Its Austrian-based subsidiary ZKW will also continue to offer LED headlamps going forward.
In March, LG launched another joint venture called Alluto with Luxoft, a subsidiary of DXC Technology that offers connected car solutions based on the webOS Auto platform.