Source Credit : CNBC
On Wednesday, Samsung Electronics announced its decision to acquire all shares of FläktGroup, a prominent provider of heating and cooling solutions based in Germany. The acquisition, valued at €1.5 billion (approximately $1.68 billion), will be executed through a transaction with the European investment firm Triton. This strategic move underscores Samsung's commitment to expanding its portfolio in the climate control sector.
Samsung said the acquisition would help it expand in the heating, ventilation and air conditioning business as the market experiences rapid growth.
“Our commitment is to continue investing in and developing the high-growth HVAC business as a key future growth engine,” said TM Roh, Acting Head of the Device eXperience (DX) Division at Samsung Electronics.
FläktGroup provides advanced heating and HVAC solutions tailored for a diverse array of buildings and facilities, with a particular emphasis on data centers that demand precise and reliable cooling systems. Samsung has projected a continued increase in data center demand, driven by the rapid expansion of generative AI, robotics, autonomous driving, and other emerging technologies.
According to a statement from Samsung, FläktGroup serves over 60 prominent clients, including leading pharmaceutical companies, biotechnology firms, food and beverage manufacturers, and gigafactories.
In March, Samsung announced that its HVAC solutions have experienced double-digit annual revenue growth over the past five years. The company has set an ambitious goal to increase revenue by more than 30% by 2025.
Samsung's strategic acquisition and emphasis on the HVAC sector occur against the backdrop of challenges faced in other business segments, which have led to disappointing earnings and declining share prices in recent quarters.
In recent years, Samsung has encountered significant competition in its contract chipmaking sector, particularly from TSMC. Additionally, the company faces challenges from Apple and various Chinese smartphone manufacturers, further intensifying the competitive landscape.
In March, Samsung co-CEO Han Jong-hee reportedly extended an apology to shareholders, emphasizing the company's commitment to pursuing "meaningful" mergers and acquisitions as a strategy to drive growth. This proactive approach reflects Samsung's dedication to enhancing its market position and fostering innovation in an increasingly competitive landscape.
