LG has made its biggest acquisition ever today in its deal of over EUR 1.1 billion. It includes LG Electronics acquiring 70% stake in ZKW Group, and LG Corp as the parent company purchasing the remaining 30%.
ZKW Group is a leading automotive lighting and headlight systems provider operating globally. The ‘strategic merger’ that may transit into a synergy, eyes at being the leaders in the global light sector for autonomous vehicle components.
Having its headquarters in Wieselburg of Austria, ZKW in the industry of high-tech automotive lighting systems has its presence in the markets across Europe, alongside China, Mexico, and the U.S.
The company chalked up revenues of EUR 1.26 billion in 2017. It as well hit over 20% in average annual sales growth rate as compared to the same in the last 5 years. Its products are found in the European leading automotive brands like BMW, Audi, Porsche, Daimler and more.
LG’s growing operations of Vehicle Components will be benefitted by ZKW’s offerings. The former wants to fuel the expansion of the premium automotive lighting segment beyond traditional auto lighting. Both the companies will together work on developing intelligent lighting solutions. The idea is to display high-resolution info and warnings on roads via sensors that include autonomous driving cameras and related communications.
As LG acquires ZKW Group, the acquisition deal entails LG being committed to maintaining work culture and autonomy of ZKW, whose CEO Oliver Schubert will keep on leading more than 9,000 employees and all global operations of the company. This as well means that the production in Austria will remain the same for the next 5 years.
The Vehicle Components Company of LG has recorded a sales growth of 26% in the US $3.15 billion in the last year. On the other hand, it is estimated that the global automotive lighting market will grow from $24.5 billion in 2017 to $29 billion by 2020. Headlights are expected to contribute 70% of the entire estimation.
As a conclusion, it is the LG biggest deal and it ideally boosts LG to be a leading player in automotive components. It looks to expand its automotive lighting business with headlights and other lighting products.