Samsung SDI said on Feb. 23 that it has acquired Magna Steyr Battery Systems (MSBS), a battery pack maker for electric vehicles. The move is designed to strengthen its presence in the global secondary battery market against its main rivals LG Chem., Panasonic and Sony.
Samsung SDI’s latest move comes at the same time that Samsung Group is accelerating its M&As drive. Samsung Group is shifting the M&A paradigm into a positive mode, a departure from its previous negative attitude. The group is maintaining an offensive posture to shore up its global competitive edge by acquiring technology through M&As.
Samsung SDI signed a deal to take over a 100 percent stake in MSBS, a subsidiary of the global vehicle engineering and contract manufacturing company Magna Steyr. The agreement come with the acquisition of all assets, including the operational site of MSBS, development and manufacturing facilities, manpower and existing contract orders.
With the acquisition of MSBS, Samsung SDI will have an integrated EV battery business system ranging from cells to modules and packs. The value of the acquisition was not disclosed, but it is estimated to be worth about 100 billion won. MSBS is to be inducted as a subsidiary of Samsung SDI on April 1.
MSBS owns the largest share of the global EV battery pack market.
Samsung SDI acquired MSBS by taking into account a global trend of the rising portion of finished EV battery pack products. The Korean company has so far focused only on the supply of cells. An increasing number of global automobile manufacturers are demanding a type of battery pack that combining modules, a battery management system and a cooling apparatus instead of the supply of cells. In particular, LG Chem began the production of EV battery packs from its Ochang plant in Cheongju, Chungcheongbuk-do in 2009. Samsung SDI has turned to outside to secure the technology related to the EV battery pack.
Samsung SDI President Cho Nam-sung said, “This acquisition is a strategic choice (for Samsung SDI) to innovate competitiveness in the EV battery business.”
Samsung SDI aims to become a top EV battery maker in the world by producing battery packs instead of outsourcing. The acquisition is designed not just to shore up its competitiveness, but also to enhance its capabilities to win orders and cope with automakers’ demands, Samsung SDI officials said.
Samsung SDI said it plans to establish an integrated EV battery manufacturing system by combining its conventional capability of developing and producing cells and MSBS’s capabilities in the battery pack business.
Business sources said the acquisition would likely serve as a trigger to expand the EV battery business. Samsung SDI plans to strengthen its presence in the global EV battery market by making the most of the Austrian battery pack plant on top of the EV battery cell plant, opened in Xian, China, in 2014 and the existing battery cell plant in Ulsan. The Korean company plans to meet the demand of automakers with a focus on Europe, North America and China.
The market survey agency B3and HIS forecasts that the global EV market will grow 24 percent annually from some 2.1 million units in 2015 to 4.7 million units in 2017 and 7.7 million units in 2020.
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