Vice Chairman and chief executive of LG Electronics Yong Nam said the reorganisation would help the company capture more of the worldwide commercial market.
The Air Conditioning business unit will now be one of five core units alongside Mobile Communications, Home Entertainment, Home Appliance and Business Solutions.
A company spokesman said: “LG’s successful air conditioning operation will be spun-off from the company’s Digital Appliance business to focus exclusively on commercial and residential conditioning, home network (HomeNet) business and building management systems (BMS).”
The chief executive of the new company has been named as Executive Vice President Hwan Yong Nho who was formerly head of the air conditioning division at Digital Applicance.
The new Home Appliance company will take over responsibility for refrigerators, washing machines, kitchenware and other domestic appliances.
LG said the reorganization was designed to “maximize growth potential in existing businesses while at the same time fully developing new ones.”
Mr Nam said: “Our business will be perfectly positioned to address tomorrow’s challenges as a result of these changes.
“This strategy will enable us to capture even more of the ever-expanding commercial market. “It will also help LG expand the value chain from device (hardware) to solutions and allow us to better address the lifestyle needs of our current and future customers.”