After Samsung Electronics Co.’s success in selling components for rivals’ smartphones, Vice Chairman Lee Jae Yong is considering a similar strategy for the world of automobiles.
Samsung is in advanced talks to buy assets of auto-parts maker Magneti Marelli from Fiat Chrysler Automobiles NV, according to people familiar with the matter. It’s particularly interested in the lighting, in-car entertainment and telematics business and could consider an acquisition of the whole company, the people said, asking not to be identified as the discussions are private.
Lee has pushed deeper into memory chips and displays to make Samsung less reliant on consumer electronics as he sold off assets and narrowed the scope of the conglomerate. A deal would position the 48-year-old, a director of Fiat Chrysler’s controlling shareholder Exor SpA since 2012, to further put his stamp on the South Korean giant and benefit from rising interest in cars from technology companies.
Apple Inc., Baidu Inc. and Google are pushing into automobiles, seeking to deploy their technology into new areas as cars become more advanced. Samsung had more than $65 billion of cash and equivalents as of June 30, according to the company.
“Samsung has little presence in auto-parts, but this acquisition will fast secure them business competence even as a late comer,” said Lee Seung Woo, an analyst at IBK Securities Co. in Seoul. “Samsung is thinking that it should change its acquisition style. It can’t really start everything from the scratch.”
Shares of Samsung closed unchanged at 1,517,000 won in Seoul. The stock has risen 20 percent this year and is on pace for its first annual increase since 2012. Samsung Electro-Mechanics Co., which makes camera modules for vehicles, climbed 6.5 percent and battery maker Samsung SDI a Co. gained 2.7 percent.
Fiat’s shares rose the most since October 2014 on Wednesday.
A deal for Magneti Marelli could be worth more than $3 billion with a goal of closing this year, said one of the people familiar with the matter. That would make it Samsung’s biggest-ever acquisition outside South Korea.