According to South Korean media, LG electronics has bought Austria auto lighting company ZKW with 1 trillion and 440 billion won (about 8 billion 548 million yuan), the largest merger and acquisition transaction in the history of LG group.
LG Electronics announced on April 26th that the company decided to sign a contract at the board meeting to hold a ZKW 70% stake of 770 million euros (about 5 billion 900 million yuan). The company also plans to purchase a remaining 30% of ZKW with 330 million euros (about 2 billion 530 million yuan). LG electronics explained that the company decided to buy ZKW because LG has chosen automotive lighting as a new growth engine for auto parts business.
ZKW was founded in 1938 to provide automotive headlights and components for BMW, Audi, Porsche and Volkswagen. Last year, sales of ZKW reached about 1 billion 260 million euros (about 9 billion 700 million yuan), an average annual growth of 20% over the past five years.
LG electronics says ZKW is famous for its advanced technology and has great potential for growth.
Previously, LG electronics mainly provided tail lights for cars, but the acquisition enabled LG to expand its business to all areas of auto parts, including headlights.
At present, the global automotive lighting market is dominated by three companies, ZKW, SL Corporation and Ichikoh. With the acquisition of ZKW by LG electronics, the Korean electronics giant will soon become the main supplier of headlights.