Acquisition of auto parts manufacturers, Samsung to "drive" it?

According to foreign media reports, following the success of Samsung Electronics in the smart phone component business, Li Zai, vice chairman of the company, is considering adopting a similar strategy in the automotive industry.

According to sources, Samsung Electronics is negotiating to acquire the assets of Magneti Marelli, an auto parts manufacturer owned by Fiat Chrysler Motors, and negotiations have entered an advanced stage. According to sources who declined to be named, Samsung Electronics is particularly interested in the latter's automotive lighting, automotive entertainment systems, and automotive information service systems. It may also consider buying the company as a whole.

Li Zai? is further developing its storage chip and display business to allow Samsung Electronics to reduce its dependence on consumer electronics products. At the same time, he sold part of the company’s assets and squeezed its business scope. 48-year-old Li Zai? has been a director of Exor SpA, the controlling shareholder of Fiat Chrysler since 2012. This transaction will allow him to further brand his identity on Samsung and allow Samsung Electronics to use the technology from a technology company. Growing interest will benefit.

As cars become more and more advanced, Apple, Baidu and Google are moving into the automotive sector to seek to deploy their technology into new areas. As of June 30 this year, Samsung Electronics has held more than $65 billion in cash and equivalents.

Lee Seung Woo, an analyst at Seoul-based securities firm IBK Securities, said: “Samsung’s share of the auto parts market is small, but this acquisition will quickly increase its competitiveness in this market, even if it is used as a A latecomer. Samsung believes it should change the style of its acquisition. It cannot start every business from scratch."

In the Seoul Stock Exchange's closing at 9:47 this morning, Samsung shares rose 0.7% to 1.527 million won. Since the beginning of this year, the stock price of the company has risen by 21%, and this year it is possible to achieve the first annual increase in the stock price of the company since 2012. In today's trading, Fiat Chrysler's share price achieved the largest one-day gain since October 2014.

One of the sources stated that Samsung’s acquisition of Magneti Marelli’s transaction may exceed US$3 billion and will be completed this year. This will be the largest acquisition that Samsung Electronics has ever made overseas.

Chip and TV business

In addition to its global leadership in the field of smartphones, Samsung Electronics is the world's largest manufacturer of memory chips and TVs. Samsung Electronics declined to comment on an e-mail statement. A spokesman for Fiat Chrysler did not comment.

In an analyst conference call held after the publication of the second quarter of last month, Sergio Marchionne, chief executive of Fiat Chrysler, said that the company is the first company with Google on driverless car technology. The major automakers that reached the agreement are negotiating with other high-tech companies on possible cooperation.

After giving up his efforts to merge with General Motors, Macionni will eliminate corporate debt as his number one assignment before leaving in 2019. Achieving this goal will enable Fiat Chrysler to better find partners. Magioni believes that the automotive industry wastes too much money and needs to be combined to save money and invest in the research and development of new technologies.

George Gallier, an analyst at Evercore ISI, a market research firm, points out: “It's very necessary for automakers to spin off their parts business and maximize their value. A few years ago, Ford and General Motors had split them. Parts business."

Last December, Samsung Electronics established a team to develop automotive parts, automotive entertainment systems, and driverless vehicles. It also cooperates with other subsidiaries of the Samsung Group to produce car batteries and provide software services. Last month, Samsung’s Shanghai subsidiary acquired BYD’s share value of RMB 3 billion to gain a share in the growing sales of the electric vehicle market.

In 2009, Magneti Marelli worked with Samsung Electronics to develop display products for automotive entertainment, information and navigation systems. At present, Samsung Electronics is working hard to expand the sales of display and lighting solutions using OLD technology, which can provide new light sources and flexible dashboards for luxury cars.

Magneti Marelli has many years of experience in satellite navigation, car networking, infotainment, and telematics service systems that provide a connection to external electronic devices. In-vehicle information service system equipment allows users to access certain services in the car, including insurance, parking and anti-theft security.

The acquisition of Magneti Marelli will help Samsung's ambitions in the automotive industry through existing brands, factories and distribution systems. The deal may allow Samsung Electronics to become a supplier of luxury brands under Fiat Chrysler, including Maserati.

In 2000, Samsung Motors was forced to sell and sell to Renault Motors. The acquisition of Magneti Marelli’s deal will be Samsung's first major expansion into the automotive industry since 2000.

Fiat Chrysler’s parts business includes Magneti Marelli, Teksi, and Comau. The company’s adjusted EBITDA for the second quarter was 2.43 billion Euros, which was mainly attributed to Magneti. Marelli's product sales increased.