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Samsung reportedly trying to buy HVAC division of Johnson Controls for $6 billion

Published: 26 Mar. 2024, 17:59

JIN EUN-SOO
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Samsung Electronics' Seocho office in southern Seoul [NEWS1]

Samsung Electronics is vying to acquire the heating and ventilation division of Johnson Controls for $6 billion, according to Reuters, in what could be its biggest merger and acquisition (M&A) deal in eight years.

The media outlet reported Sunday that the Korean electronics giant is competing with Robert Bosch and Lennox International to acquire the business division from the Ireland-based company, citing unnamed sources.

It added that other competitors could join, and the actual deal is "still months away."

Johnson Controls, founded in 1885, offers a wide range of building equipment and appliances, including heating, ventilation and air conditioning (HVAC) equipment and air cleaning, refrigeration and fire detection appliances.

The company has recently been streamlining its business portfolio to focus more on smart building solutions to join the AI boom and is believed to be shopping around its HVAC assets.

Market observers say Samsung's possible acquisition of Johnson Controls' HVAC assets will boost the Korean company's HVAC business, which is currently focused on individual households.

Samsung Electronics has continued to give positive signals to the market by mentioning a possible M&A deal since 2022.

Even though Samsung has shunned striking a big deal since buying Harman for $8 billion in 2017, it has been stockpiling cash for a major move.

Vice Chairman Han Jong-hee most recently said in a shareholders' meeting that "progress has been made" on the deal and that more details could be spilled "soon." There were reports that it is mulling a partial acquisition of German auto components company Continental.

The market responded positively to the possible acquisition deal on Tuesday.

Its stock prices went over the 80,000-won mark for the first time in more than two years on Tuesday morning and closed at 79,900 won, up 2.17 percent from the previous trading day.

The HVAC market is estimated to grow as demand for energy-efficient products rises due to the global decarbonization effort. The market is forecast to reach $61 billion by 2028, up from $58.4 billion this year, according to market tracker IBISWorld.

BY JIN EUN-SOO [[email protected]]