Possibility of synergy through technical and professional skills… “It seems difficult to find an acquisition company”
[오늘경제 = 이효정 기자]
After LG Electronics announced that it would consider the sale of the MC division in charge of the mobile business, the industry is naturally drawing attention as a candidate for the acquisition.
LG Electronics’ smartphone market share is currently low, but with over 30 years of experience and technology ahead of the launch of the world’s first rollable phone, significant synergies are expected when taking over.
In the industry on the 21st, Google, Facebook, Volkswagen, and Vietnam’s Bean Group are being discussed as potential candidates to acquire LG Electronics’ MC division.
Google is dividing Apple’s iOS and global smartphone market with its mobile operating system Android, but its own smartphone pixel series has little presence.
Prior to the Pixel, the Nexus series and the acquisition of Motorola are constantly pursuing to strengthen the smartphone business, but they are still not performing as expected.
There are many cases of joint ventures with LG Electronics, such as the successive introductions of Nexus 4, 5, and 5X from 2012 to 2015.
Facebook is working on augmented reality (AR) and virtual reality (VR) businesses through its subsidiary Oculus acquired in 2014.
Industry analysis is that in order to promote AR and VR business in earnest in the future, it is possible to draw a blueprint to strengthen the technological linkage with smartphones and expand the related ecosystem.
Vietnam’s Vin Group, which operates smartphone maker Vinsmart, is also on the verge of acquisition candidates.
In the industry, there are observations that Bean Smart, which has strengths in mid- to low-priced products, will seek to expand its business by securing LG Electronics’ Vietnam plant and premium product technology.
However, there is also an analysis that the fund situation is not good as the resort business, which is the flagship of Bean Group, has been sluggish after the corona 19 incident.
There is a prospect that Volkswagen, a German automobile company, can also enter into an acquisition to strengthen its electronic equipment business.
It is said that as the automobile industry rapidly transitions to smart mobility based on the Internet of Things (IoT), the demand for smart phone technology, a key terminal for this, will be great.
In addition, there are constant observations that even Chinese companies, which have a business structure focused on mid- to low-end models, will not have little demand for LG Electronics’ premium product capabilities. Even last year, news and sales rumors circulated.
Nevertheless, the prospect that the acquisition itself will not be easy is also difficult.
It is argued that there is not a big factor in acquiring LG Electronics smartphones, which have a market share of only 1 to 2% with the global smartphone market already oversaturated.
Even if the size was reduced, the number of employees over 3,000 and sales reached 4 trillion won last year, so the acquisition amount is inevitable.
With the frozen market still not recovering after Corona 19, it is not an easy option to start a large-scale merger and acquisition.
Accordingly, there is a prospect that LG Electronics will focus on reducing and reorganizing the mobile business for the time being and promoting the sale in the mid to long term. In lieu of the MC division’s’trade sale’, the divisional sale of overseas assets and intellectual property rights is also discussed as a possible option.
An official in the industry said, “Even if you try to sell it with LG Electronics, it doesn’t seem easy to find a partner.”
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