LG Acquires Global Premium Automotive Lighting Company ZKW Group
EUR 1.1 Billion Deal LG's Largest in 60 Year History
SEOUL, South Korea, April 26, 2018 /PRNewswire/ -- Earlier today, the Board of Directors of LG Electronics (LG) approved the acquisition of leading automotive lighting and headlight systems provider ZKW Group, capping a deal worth more than EUR 1.1 billion, LG's largest acquisition to date. Under the terms of the transaction, LG Electronics will acquire a 70 percent stake in ZKW Group with parent company LG Corp. purchasing the remaining 30 percent.
The strategic merger is expected to result in synergies that allow the combined companies to lead the global lighting sector in autonomous vehicle components. Headquartered in the Lower Austrian town of Wieselburg, ZKW Group is a high-tech leader in automotive lighting systems with a presence in markets throughout Europe in addition to China, Mexico and the United States.
With revenues of EUR 1.26 billion in 2017 and an average annual sales growth rate of more than 20 percent over the past five years, ZKW products are found in many major European premium automotive brands including Audi, BMW, Porsche and Daimler, among others. ZKW's offerings will complement LG's growing Vehicle Components operations which expects the premium automotive lighting segment to expand faster than traditional auto lighting.
ZKW's lighting business, which has focused on premium vehicle components and related accessories, will have a much greater market presence through LG's extensive global sales network. As the industry transitions from traditional halogens to LEDs and lasers, ZKW sees itself in the enviable position of being only one of the first companies1 worldwide that produces matrix LED headlamps and laser headlights. An industry innovator throughout its history, ZKW Group was an early investor in laser headlights. LG and ZKW will focus on developing intelligent lighting solutions that display high-resolution information and warnings on roads collected from sensors, including autonomous driving cameras and automotive communications
ZKW Group will continue to be managed by the current team led by CEO Oliver Schubert, who will be responsible for all operations around the world which includes more than 9,000 employees. LG is committed to maintaining ZKW's autonomy and workplace culture. In particular, production in Austria will remain unchanged for at least five years.
"Through this deal, LG is adding a new growth opportunity to its automotive components business, a future growth opportunity with tremendous potential," said Jo Seong-jin, chief executive officer of LG Electronics. "In addition to strengthening ZKW's product development capabilities, LG's global production experience and international business network will present unlimited opportunities for both companies in the auto market of tomorrow, which includes intelligent lighting solutions."
LG's Vehicle Components Company, which oversees the company's automotive components business, recorded sales growth of 26 percent to USD 3.15 billion in 2017. The global automotive lighting market is expected to grow from USD 24.5 billion last year to USD 29 billion by 2020, with headlights contributing 70 percent of the total. Through this deal, LG is reinforcing its position as a leading player in automotive components and intends to expand the range of its automotive lighting business from rear lamps to related lighting products, such as headlights.
About LG Electronics, Inc.
LG Electronics, Inc. is a global innovator in technology and manufacturing with operations in more than 100 locations around the world. With 2017 global sales of USD 55.4 billion (KRW 61.4 trillion), LG is comprised of five companies ― Home Appliance & Air Solutions, Home Entertainment, Mobile Communications, Vehicle Components and Business-to-Business ― and is a world-leading producer of TVs, refrigerators, air conditioners, washing machines and mobile devices in addition to premium LG SIGNATURE products and ThinQ featuring artificial intelligence. For the latest news and information on LG Electronics, visit www.LGnewsroom.com.
About LG Electronics Vehicle Components Company
LG Electronics Vehicle Components Company focuses on commercializing autonomous and environmentally responsible automotive components and core solutions based on LG's proprietary technologies. Its Smart Solutions business includes a diverse lineup of offerings such as infotainment systems (audio video, audio video navigation, etc.), advanced driver assistant system, connectivity and other intelligent products. Green Solutions focuses on electronic powertrains (motor/drive unit/inverter/converter), battery packs, vehicle thermal systems and lighting solutions (head/rear/interior lamp). For more on LG's Vehicle Components, visit www.LG.com.
About LG Electronics USA
LG Electronics USA Inc., based in Englewood Cliffs, N.J., is the North American subsidiary of LG Electronics, Inc., a $55 billion global force and technology leader in home appliances, consumer electronics, mobile communications and vehicle components. LG Electronics sells a range of stylish and innovative home entertainment products, mobile phones, home appliances, commercial displays, air conditioning systems, energy solutions and electric vehicle components in the United States, under LG's "Life's Good" marketing theme. www.lg.com.
1 ZKW, Hella, AL, Koito
SOURCE LG Electronics USA
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