Latest news with #FlaktGroup
Korea Herald
15-05-2025
- Business
- Korea Herald
Samsung's next big bet? M&A hopes rise in advanced tech
Samsung Electronics is drawing renewed attention over the possibility of further mergers and acquisitions in its core high-tech sectors, following its recent purchase of a European heating and cooling systems firm. Questions remain over whether the company has the liquidity to pursue large-scale deals, as a significant portion of its cash reserves remains tied up in overseas subsidiaries. The tech giant announced Wednesday its $1.7 billion acquisition of Flakt Group, a leading European HVAC (heating, ventilation and air conditioning) firm, marking the company's most active large-scale M&A drive in about eight years. The deal comes shortly after Samsung subsidiary Harman's purchase of the audio division of US-based Masimo earlier in May. The surprise deal was welcomed as a strategic move tied to the growing demand for data center infrastructure, but it also drew disappointment from some who expected bolder action in Samsung's core technology areas. "While the HVAC deal is linked to the data center business, it still raises questions about whether resources are being directed to the right areas,' said Hwang In-tae, a business professor at Chung-Ang University. 'It's concerning that Samsung appears to be drifting away from its core businesses, where the real challenges lie.' Hwang Yong-sik, a professor at Sejong University College of Business and Economics, echoed the sentiment. He noted that amid concerns over Samsung's weakening grip on key sectors like AI and semiconductors, the market is now watching closely to see whether the company will follow through on its pledge outlined in its letter to shareholders. "We will pursue new opportunities in areas such as robotics, medical technology and next-generation semiconductors to establish future growth engines in the emerging era driven by the AI industry," Samsung said in a letter to shareholders outlining its 2025 strategy. Samsung's recent deals have been relatively small in scale. Among them is its investment in the Korean robotics company Rainbow Robotics. In 2023, Samsung invested 86.8 billion won in the company to acquire a 14.7 percent stake. It later raised its ownership to 35 percent through a call option, bringing the firm under its consolidated financial reporting. In 2019, Samsung acquired Israel-based camera technology firm Corephotonics for $155 million. In 2024, the company also purchased Sonio, a French startup specializing in medical ultrasound systems, for $92.7 million. Analysts view Samsung as well-positioned for further M&A, with 105.1 trillion won in cash and cash equivalents as of the first quarter. However, most of the funds are tied up in overseas subsidiaries, making it difficult for the company to mobilize capital for large-scale deals. 'We want to bring our overseas cash reserves to Korea, but local authorities keep a close eye on it,' a Samsung official said under the condition of anonymity. A significant portion of Samsung's cash is held in countries like Vietnam, where foreign exchange controls and local operational constraints make repatriating funds a complex process. These limitations have become a key factor in the company's ability to execute large-scale acquisitions. At its Korean headquarters, Samsung held 11.8 trillion won in cash and cash equivalents as of the end of 2024. While Samsung has pointed to challenges in accessing overseas cash reserves, some argue that the company's exceptionally low debt ratio suggests it has ample room to borrow and that the company should be able to secure funding for large-scale deals if needed. 'Samsung's debt ratio is extremely low. The ideal ratio is not absolute, but 100 percent is a general benchmark. When entering a new business, it's not unusual for firms to raise capital, and given the company's balance sheet, it certainly has room to do so," Hwang of Chung-Ang University said. As of December 2024, Samsung's debt ratio — calculated as total liabilities divided by total equity — stood at 27.9 percent. 'A single M&A deal may not bring an immediate turnaround, but a good M&A deal could serve as a strategic lever to strengthen its core capabilities,' Hwang of Sejong University said.
Nikkei Asia
14-05-2025
- Business
- Nikkei Asia
Samsung to buy German cooling system maker FlaktGroup for $1.7bn
SEOUL (Reuters) -- Samsung Electronics said on Wednesday it had agreed to buy Germany's FlaktGroup for 1.5 billion euros ($1.68 billion) as it looks to meet growing demand for cooling of data centers used for artificial intelligence projects. In the South Korean company's biggest acquisition in eight years, it will purchase the air conditioning and heating systems maker from private equity group Triton.
Business Recorder
14-05-2025
- Business
- Business Recorder
South Korean shares rise for third day on chip boost
Round-up of South Korean financial markets: South Korean shares gain over 1% on US-China trade optimism South Korean shares rose for a third straight session on Wednesday, as chipmakers tracked overnight gains in their US peers. The benchmark KOSPI was up 15.22 points, or 0.58%, at 2,623.64, hitting its highest since March 27, as of 0125 GMT. Overnight, the S&P 500 and the Nasdaq closed higher for a second straight day after softer-than-expected inflation numbers added to investor optimism from Monday when the US and China announced a trade truce. Chipmaker Samsung Electronics rose 0.62% and peer SK Hynix gained 3.53% after the Philadelphia Semiconductor Index jumped 3.2% on Tuesday. Samsung Electronics said it has agreed to acquire all shares of Germany-based air conditioning and heating systems maker FlaktGroup for 1.5 billion euros ($1.68 billion) from the European investment firm, Triton. Hyundai Motor and sister automaker Kia fell 0.97% and 1.81%, respectively. Steelmaker POSCO Holdings slipped 3.11%, while drugmaker Samsung Biologics rose 0.10%. Of the total 935 traded issues, 430 advanced and 434 declined. Foreigners were net buyers of shares worth 142.6 billion won. The won was quoted at 1,413.5 per US dollar on the onshore settlement platform, 0.2% higher than Tuesday's close of 1,416.3. In the money and debt markets, June futures on three-year treasury bonds were unchanged at 107.50.
Korea Herald
14-05-2025
- Business
- Korea Herald
Samsung makes biggest acquisition in 8 years with $1.7b FlaktGroup deal
Tech giant eyes global HVAC leadership by integrating FlaktGroup's expertise with its smart solutions Samsung Electronics announced Wednesday that it has signed an agreement to acquire FlaktGroup, a German heating and cooling solutions provider, for 1.5 billion euros ($1.7 billion), marking its largest overseas acquisition in eight years. The tech giant said it will acquire 100 percent of the shares in the heating, ventilation and air conditioning company from European investment firm Triton, aiming to strengthen its HVAC business amid rapid market growth. It is Samsung's first multibillion dollar deal since acquiring Harman, a company specializing in automotive electronics and audio, in 2017. "Through the acquisition of FlaktGroup, an applied HVAC specialist, Samsung Electronics has laid the foundation to become a leader in the global HVAC business, offering a full range of solutions to our customers," said Roh Tae-moon, acting head of the Device eXperience Division at Samsung Electronics. "Our commitment is to continue investing in and developing the high-growth HVAC business as a key future growth engine." Samsung aims to complete the transaction within the year. Based in Herne, Germany, FlaktGroup boasts over a century of technological expertise and design capabilities, offering customized HVAC products and solutions for a broad range of clients. The company supplies high-efficiency, high-reliability HVAC systems to mission-critical facilities such as data centers requiring stable cooling, museums and libraries preserving sensitive artifacts, airports with high passenger volumes, and hospitals where hygiene and precise environmental control are essential. 'We are extremely pleased that FlaktGroup has become a part of Samsung Electronics,' said FlaktGroup CEO Trevor Young. 'As a global top-tier HVAC specialist with over a century of expertise, we have been trusted by large international clients for our technological and product innovations. With Samsung Electronics' global business foundation and investment, we expect to accelerate our growth even further.' FlaktGroup also provides industry-leading liquid and air cooling products for large-scale data centers, an area with high entry barriers due to the need for global supply capabilities and customized solutions. The company received the DCS Cooling Innovation of the Year Award last year in recognition of its technological leadership. According to market research cited by Samsung, the applied HVAC market is projected to grow from $61 billion in 2024 to $99 billion by 2030, with an annual growth rate of 8 percent. The data center cooling market is expected to grow even faster, at 18 percent annually. Samsung has been actively expanding its HVAC business in response to surging demand from data centers, fueled by the rise of technologies such as generative AI, autonomous driving and augmented reality. In May last year, Samsung established a joint venture with Lennox International to bolster its presence in the North American HVAC market, integrating Lennox's distribution channels with its own. Looking ahead, Samsung plans to offer a full suite of HVAC and building energy management systems by combining its building integration solutions with FlaktGroup's advanced HVAC control technologies. It also aims to expand its service and maintenance business in the global HVAC sector.
Time of India
14-05-2025
- Automotive
- Time of India
Samsung Electronics to buy German cooling system maker FlaktGroup for $1.7 billion
South Korea's Samsung Electronics on Wednesday said it has agreed to buy FlaktGroup, a German maker of air conditioning and heating systems, for 1.5 billion euros ($1.68 billion) from private equity group Triton. Samsung, through its biggest acquisition in eight years, said it aims to tap demand for data centres for artificial intelligence projects, which require stable cooling. The data centre segment has a high barrier to entry requiring global supply experience and the ability to present optimal designs and solutions, Samsung said in a statement. It expects the FlaktGroup deal to close within this year, it said. Shares in the consumer electronics and semiconductor maker inched up 0.7% largely in line with the benchmark KOSPI. Samsung, led by Chairman Jay Y. Lee, at a shareholder meeting in March said it was looking for deals to drive growth after largely missing out on an AI chip boom. In contrast, compatriot SK Hynix supplies advanced high bandwidth memory (HBM) chips to AI leader Nvidia. Investors expecting bigger deals involving Samsung's cash cow chip business might feel underwhelmed by the FlaktGroup announcement, analysts said. "This acquisition is more about reinforcing its consumer electronics and home appliance businesses, so it is not the game-changing deal the market had been hoping for," said Greg Roh, head of research at Hyundai Motor Securities. Samsung's appliance business also makes commercial cooling and heating systems. "It feels like the company is playing it safe rather than making bold bets," Roh said. Samsung has shunned major acquisitions since its $8 billion purchase of car electronics maker Harman International Industries in 2017. This month, Harman agreed to buy the audio business of U.S. firm Masimo for $350 million. Consumer audio is a new growth engine, Samsung has said, alongside cooling and heating systems, medical and robotics. In December, Samsung became the largest shareholder of South Korea's Rainbow Robotics with the purchase of an additional 267 billion won ($189.03 million) stake. ($1 = 0.8937 euros) ($1 = 1,412.5000 won)
