Samsung Rumored to Buy Fiat's Auto Lighting and Electronics Division

(Translator: Janet Chen, Editor, LEDinside)

To cope with saturated smartphones' market and gradually weakening sales, Samsung Electronics is considering to purchase Fiat Chrysler Group's automobile component manufacturer Magneti Marelli to develop new market segments.

According to the Korea Times and the Korea Herald, sources said Samsung Electronics intends to buy part of or the whole Magneti Marelli on Aug3, 2016. Samsung is more interested in divisions such as lighting, in-car entertainment, and telematics because it could reduce Samsung's dependency on the consumers' electronics market. Samsung is rumored to offer US $3 billion bid for the company and sign the deal by the end of this year. If true, this will be Samsung's largest oversea merger ever.

The automotive segment has been the hottest emerging area of technology industry. Google and Apple enthusiastically rushed to invest in self-driving cars for business opportunities, Samsung has developed this segment for some time already. In 2015, Samsung established a team to manage its auto part business. Recently, Samsung invested 510 billion Korean won to buy shares of China’s electric vehicle (EV) manufacturer BYD.

Meanwhile, Samsung's Head, Lee Jae-yong has been an external board member of Exor S.p.A (the holding company of Fiat Chrysler Automobiles), which made the rumored acquisition even more convincing. A senior fund manager pointed out that Samsung Electronics may not intend to compete with international auto giants and might only want to sell auto parts to major car brands, in preparation of the post-smartphone era. Magneti Marelli  hascollaborated with Samsung and is one of the largest clients  of Samsung Display, a panel maker of Samsung Electronics.

Fiat Chrysler's stock price was encouraged by the above news, rose 8.88% onWednesday and closing at US $6.62. This was a historic one-day rise of its stock price since October 2014. During the August 4th morning session, Samsung Electronics' stock price gained about 0.8%

Recently, Samsung's smartphone business has frequently brought positive news. From April 2016 to June 2016, Samsung Electronics' smartphone share in the North America market soared to 32.7%, significantly exceeding Apple's and reclaiming the top spot, according to data compiled by Strategy Analytics (SA) wrote Yonhap News Agency. This was the first time that Samsung's smartphone share surpassed Apple's in the North America market for the past two years (from April~June 2014).

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