"The most difficult issue will naturally be pricing and the labour issue," said Jon Chong-hwa, an analyst at KEB Smith Barney Securities.

The LG Group announced on Wednesday that it would sell all its stake to the Hyundai Group, ending four months' wrangling over the so-called "big deal" between two of Korea's largest family-run conglomerates.

With the acquisition, Hyundai Electronics will emerge as the world's second-biggest dynamic random access memory (DRAM) supplier after South Korea's Samsung Electronics Co

Hyundai had been expected to take a 70-per cent controlling share after a merger with LG Semicon. But, LG surprisingly abandoned its cherished chip business, under pressure from the government and its creditors on Wednesday.

Neither company has put a price tag on the deal, butestimates by analysts and local media ranged from 2.5 trillion won ($2.2 billion) to five trillion won.

LG Semicon is trading at 15,400 won on the local stockmarket, but was expected to demand around a 30-percent premium as it has sharply cut its debt-to-equity ratio and is most likely to see its net account turn to black, analysts said.

Kang Yu-sig, who heads LG Group's restructuring team, told reporters on Wednesday that the sale price should reflect the value of both tangible and intangible assets, which he said would include synergy and cost-saving effects to benefit Hyundai.

"LG Group may also insist that the stock price of Samsung Electronics Co should be taken into account," Jon of KEB Smith Barney said.

Samsung was trading at 94,100 won on Thursday.

LG has also demanded that Hyundai retain all of its workers but analysts said many of LG's non-production line workers would probably lose their jobs, although not immediately.

Hyundai Electronics president Kim Young-hwan indicated that somelayoffs may be inevitable. "That's one of the tough questions I have to answer," he told foreign reporters. "We'll do it gradually, wherever it makes sense."

If the chip market's recovery loses momentum, Kim said that Hyundai might have to close down one of two fabrication plants. "It all depends on how the market works out."

The deal will also shake up the global DRAM industry, as the market will now be dominated by three to four heavyweight players, including the enlarged Hyundai, analysts said.

"It will help stabilise global chip prices by enabling the emerging big players to more efficiently counter market trends," said Tony Jung, an analyst at SG Securities.

Years of sliding prices left the world's DRAM makers with heavy debt. Hyundai and LG have both piled up debt reaching six to nine times their shareholders' equity.

Analysts said the new top players joining current leader Samsung would be Hyundai, NEC Corp and Micron Technology Inc

"With the market dominated by several big players, supplycontrol will become easier and more efficient," said Jung.

LG Semicon's creditor financial institutions agreed late on Thursday to immediately scrap their financial sanctions imposed last week over LG.