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Samsung to acquire FläktGroup for $1.7B in return to 'meaningful deals'

Published: 14 May. 2025, 15:32 Updated: 14 May. 2025, 19:45

A flag with Samsung Electronics' logo waves in the wind in front of the firm's offices in Seocho District, southern Seoul, on April 30. [NEWS1]

Samsung Electronics will acquire Germany’s FläktGroup for 1.5 billion euros ($1.7 billion), marking Samsung’s largest acquisition since its $8 billion purchase of Harman in 2017.

The decision to acquire the leading manufacturer of heating, ventilation and air conditioning (HVAC) systems, announced Wednesday, signals an aggressive expansion into the fast-growing global market, particularly targeting data center infrastructure.

Betting big on HVAC

The acquisition comes on the heels of a joint venture Samsung launched last year with Lennox International, the third-largest HVAC company in North America. With FläktGroup, Samsung is set to strengthen its footprint in Europe and broaden its HVAC portfolio to cover large-scale commercial and industrial facilities.

Samsung said it expects to complete the acquisition from Britain-based private equity firm Triton by the end of the year.

Founded in 1918 and headquartered in Herne, western Germany, FläktGroup specializes in cooling solutions for data centers, cleanrooms, industrial plants and residential and commercial buildings. The company generates approximately 700 million euros in annual revenue and serves over 60 major clients across sectors including pharmaceuticals, health care, food and beverage and plant engineering.

Fläkt’s data center solutions recently earned the Innovation of the Year award at the 2024 DCS Awards, often dubbed "the Oscars of the data center industry."

Market analysts project the data center HVAC segment will grow at an average annual rate of 18 percent through 2030.

“In anticipation of surging demand for data centers driven by AI, robotics, autonomous driving and extended reality, we decided to acquire a top-tier global HVAC firm,” Samsung said in a statement. “Combining Samsung’s building management systems with Fläkt’s HVAC control technologies will create a stable and profitable growth platform.”

The acquisition will allow Samsung to expand beyond its traditional focus on air conditioning systems for homes and small businesses to include centralized HVAC systems for airports, shopping malls and industrial sites.

“We will continue to foster HVAC as a future growth engine, given the strong potential of the market," said Vice Chairman and Device eXperience division acting head Roh Tae-moon.

Samsung Electronics' offices in Seocho District, southern Seoul [NEWS1]

Return to big M&A

This latest deal follows Samsung’s acquisition of the audio business unit from U.S. medical device company Masimo just a week ago on Thursday.

Together, the two back-to-back moves suggest Samsung is reentering the merger and acquisition (M&A) market in earnest after a long lull caused by legal risks surrounding group Executive Chairman Lee Jae-yong.

Since last year, the tech giant has gradually resumed dealmaking through smaller investments in AI, robotics and medical technology startups, including Rainbow Robotics, Oxford Semantic Technologies and Sonio.

At Samsung’s annual shareholder meeting in March, the late Vice Chairman Han Jong-hee hinted at significant M&A activity this year, promising “meaningful deals with tangible results.”

An industry insider noted that Harman, once criticized for a lackluster performance post-acquisition, now contributes operating profits on par with Samsung’s home appliance business.

“The company is now more confident in pursuing M&A,” the source said.

Samsung’s recent focus on business-to-business sectors like automotive components and HVAC comes amid slowing growth and macroeconomic headwinds in its traditional business-to-consumers business.

A Samsung spokesperson said the company will continue to pursue M&A in next-generation and transformative technology fields that align with its innovation strategy.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY PARK HAE-LEE [[email protected]]