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Samsung Electronics to buy stake in Chinese electric car maker BYD

Collected: 2016.07.15

Distributed: 2016.07.18

Source: Go Direct

[BYD plant in Xian, China]

Samsung Electronics Co. is mulling equity investment in BYD Co. that makes smartphone parts and is China’s as well as the world’s largest manufacturer of electric vehicles.

The South Korean tech giant that has eyes in the electronic automotive business said on Friday that it is in talks to acquire stake in BYD. Details will be later announced once the two companies finalize negotiations.

The investment banking industry estimates that Samsung Electronics may invest 3 billion yuan ($448 million) to buy a 2 percent stake through purchase of new shares by a Samsung semiconductor sales unit.

Samsung said that the investment aims to bolster the two companies’ partnership in electric vehicles and smartphone components and won’t affect management of the Chinese company.

Samsung is a major supplier of automotive sensors, chips, and display to the Chinese company. As a shareholder, it will be able to up its supplies. BYD supplies Samsung with metal phone cases and low-cost batteries. The world’s largest smartphone maker said the investment is not related to aid Samsung SDI’s battery supply.

BYD, founded as a manufacturer of rechargeable batteries, came under foreign spotlight after it drew major investment from Warren Buffett’s Berkshire Hathaway Inc. The company’s subsidiary MidAmerican Energy Holdings invested $240 million to buy a 9.98 percent stake in BYD in 2008.

BYD is the world’s largest electric vehicle maker, selling more than more than 60,000 units of electric and plug-in hybrid cars last year.

By Song Sung-hoon

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