News that South Korea’s Samsung Electronics plans to invest in China’s leading electric vehicle maker, BYD , raises the prospect of a powerful alliance that could grab pole position in the world’s fastest-growing e-vehicle market.
The two companies announced that they were exploring a tie-up that would see Samsung take a big stake of a planned secondary stock offering by BYD. BYD would not confirm a South Korean press report saying that Samsung would spend about 3 billion yuan (just shy of $450 million) for a 4% interest in BYD as part of the deal.
The planned investment would bring together two northeast Asian manufacturing powerhouses, each with a strong, even cultish, corporate culture.
Samsung is by far the bigger company – it is the flagship company of South Korea’s most powerful business group – but it doesn’t have much of a track record in taking a small minority stake in a sizeable Chinese company. Samsung is also a substantial battery maker in its own right, with one of its group companies (Samsung SDI ) the world’s largest producer of lithium-ion batteries. Samsung, led by second-generation owner Lee Kun-Hee (see photo gallery below), is having difficulty cracking the Chinese electric auto market. Although Samsung built a battery plant in China it has not had success in getting on a government-approved procurement list for electric-vehicle batteries in China.
Originally published in Forbes. Can be accessed here.