The board of directors of LG Electronics (LG) has approved the acquisition of automotive lighting and headlight systems provider, ZKW Group, capping a deal worth more than €1.1 billion ($1.32 billion) — LG’s largest acquisition to date.
Under the terms of the transaction, LG will acquire a 70 percent stake in ZKW Group with parent company LG Corp. purchasing the remaining 30 percent.
The strategic merger is expected to result in synergies that allow the combined companies to lead the global lighting sector in autonomous vehicle components.
Headquartered in the Lower Austrian town of Wieselburg, ZKW Group is a leader in automotive lighting systems with a presence in markets throughout Europe in addition to China, Mexico and the US.
With revenues of €1.26 billion in 2017 and annual sales growth rate of more than 20 percent on average over the past five years, ZKW products are found in many major European premium automotive brands including Audi, BMW, Porsche and Daimler, among others.
ZKW’s offerings will complement LG’s growing vehicle components operations, which expect the premium automotive lighting segment to expand faster than traditional auto lighting.
As the industry transitions from traditional halogens to LEDs and lasers, ZKW sees itself in the enviable position of being only one of the first companies worldwide that produces matrix LED headlamps and laser headlights.
An industry innovator throughout its history, ZKW Group was an early investor in laser headlights. LG and ZKW will focus on developing intelligent lighting solutions that display high-resolution information and warnings on roads collected from sensors, including autonomous driving cameras and automotive communications
ZKW Group will continue to be managed by the current team led by CEO Oliver Schubert, who will be responsible for global operations, covering over 9,000 employees.
LG is committed to maintaining ZKW’s autonomy and workplace culture. In particular, production in Austria will remain unchanged for at least five years.
“Through this deal, LG is adding a new growth opportunity to its automotive components business, a future growth opportunity with tremendous potential,” said Jo Seong-jin, chief executive officer of LG Electronics.
