BackSamsung in talks with BYD to buy stake in electric-car maker
Samsung's investment in BYD, backed by Warren Buffett's Berkshire Hathaway, would bolster its semiconductor business for cars
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Seoul: Samsung Electronics Co., the world’s largest maker of phones and memory chips, said it’s in talks with BYD Co. about investing in the Chinese electric-car manufacturer.
Details including the size of the investment will be disclosed when they’re confirmed, Samsung said on Friday in an e-mailed statement. The investment in BYD, backed by Warren Buffett’s Berkshire Hathaway Inc., would bolster Samsung’s semiconductor business for cars, the South Korean company said.
BYD said Samsung has been actively pushing forward talks about buying its shares in a private placement. Talks are still underway, the Chinese company said, denying a report by the Korea Economic Daily that an agreement was reached to acquire a 4% stake.
Samsung is pursuing the investment after its affiliate was among foreign battery makers left off a list of suppliers approved by China, where sales of electric vehicles are surging and the government has sped up construction of charging points. The talks with BYD also add to the global trend of technology companies and automakers collaborating as car buyers increasingly demand more advanced power-trains and features that improve connectivity and safety.
“It puts Samsung into the electric-vehicle subsystem supply chain for a key Chinese electric vehicle and battery manufacturer," said Bill Russo, a Shanghai-based managing director at Gao Feng Advisory Co. “BYD gets a technology innovation pipeline partner with a reputable brand."
BYD rose as much as 5.7%, its biggest intraday gain since 29 March.
China surpassed the US as the largest market for electric vehicles last year. The government wants sales of what it calls new-energy vehicles to exceed 3 million units a year by 2025. Deliveries of new-energy vehicles more than doubled to about 170,000 units in the first half of the year, according to the China Association of Automobile Manufacturers (CAAM).
BYD won approval from the Chinese government in February to raise as much as 15 billion yuan through additional share sale to help fund expansion of its production of batteries for new-energy vehicles and product development. The company has six months to sell the shares after winning approval. Bloomberg
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