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The Korea Herald
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THE INVESTOR
March 19, 2024

LG

LG set to acquire automotive light maker ZKW for W1.6tr

  • PUBLISHED :April 23, 2018 - 11:09
  • UPDATED :April 23, 2018 - 11:09
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[THE INVESTOR] LG Electronics is in final talks to acquire Austrian automotive light maker ZKW Group for about 1.6 trillion won (US$1.5 billion), its largest-ever purchase, according to industry sources on April 23. 

The two firms have been negotiating for almost two years and are likely to sign a deal later this month. 


BMW i8 hybrid uses ZKW's premium LED headlights.



ZKW produces lights, electric systems and electronic modules for vehicles, including LED-based high-intensity headlights. Last year, its sales reached 1.2 billion euros (US$1.40 billion).

Despite its modest market share of about 5 percent, it is one of the fast-growing companies supplying to luxury carmakers like BMW, Mercedes-Benz and Audi.

“Considering the high entry barriers in automotive industry, not to mention the crucial partnerships with carmakers, LG will be able to reduce both time and costs for its automotive push,” said Park Gang-ho, an analyst at Daishin Securities.

The buying price is almost equivalent to LG’s annual investment in its vehicle component business unit that was launched in 2013. Sources say the firm could offset the costs for its global expansion by taking advantage of ZKW’s global operations in the US, Mexico, China, India and Europe.

LG’s car parts sales have almost doubled over the past three years to 3.38 trillion won (US$3.10 billion) last year. Its sister firms, including LG Innotek, LG Chem and LG Display, are also upping their ante on automotive parts.

By Lee Ji-yoon (jylee@heraldcorp.com)

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