LG acquires automotive lighting supplier ZKW for US$ 1.31 billion, including a plant in Guanajuato

LG acquires automotive lighting supplier ZKW for US$ 1.31 billion, including a plant in Guanajuato

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Korean manufacturer LG Electronics announced its Board of Directors has approved the acquisition of Austrian automotive lighting and headlight systems provider ZKW Group, capping a deal worth more than EUR 1.1 billion (US$ 1.31 billion), LG's largest acquisition to date. 

Under the terms of the transaction, LG Electronics will acquire a 70% stake in ZKW Group with parent company LG Corp. purchasing the remaining 30%.

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 high-tech leader in automotive lighting systems with a presence in markets throughout Europe in addition to China, the United States and Mexico.

In May 2016, the company opened a production facility in Silao, Guanajuato, to supply light-emitting diode headlights and lighting modules for automakers in North America such as General Motors and BMW.

With revenues of EUR 1.26 billion (US$ 1.51 billion) in 2017 and an average annual sales growth rate of more than 20% 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 expects the premium automotive lighting segment to expand faster than traditional auto lighting.

ZKW's lighting business, which has focused on premium vehicle components and related accessories, will have a much greater market presence through LG's extensive global sales network. 

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.

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 all operations around the world which includes more than 9,000 employees. LG is committed to maintaining ZKW's autonomy and workplace culture. 

"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. 


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