LG Electronics revealed its latest acquisition in the vehicle components sector, consisting of ZKW Group's automotive lighting business. of which 70-percent will be taken over by LG Electronics, while the remaining 30-percent stake will be acquired by its parent LG Corp. The Austrian lighting company will continue to be managed by the current CEO and production will remain unchanged for the next five years at the least. At present, ZKW Group's automotive lighting business supplies premium LED headlamps, laser headlights and other related vehicle components and accessories, and following the acquisition, both companies will continue jointly developing intelligent lighting solutions, as well as cameras and sensors for autonomous driving.
Last year, ZKW Group registered revenues of €1.26 billion and throughout the past half a decade, the company averaged an annual sales growth rate of over 20-percent. LG Electronics says that the recent deal is worth more than €1.1 billion ($1.34 billion), making it the company's largest acquisition to date. ZKW Group operates in numerous markets and has a wide variety of partners in the car industry, including brands such as Audi and BMW, as well as Porsche. The company will remain responsible for its existing operations around the globe but the merger aims to strengthen ZKW's capabilities for developing new products and LG's ability to distribute them. In addition, ZKW's lighting business should leverage LG's international network to present new business opportunities for both parties, according to LG Electronics CEO Jo Seong-jin.
ZKW's solutions will be offered as part of LG's Vehicle Components portfolio and while the consolidation should fuel new advancements in AI and autonomous driving, the companies also expect to supply products for the growing premium automotive lighting segment which seems to be expanding at an accelerated rate and is expected to grow to a value of $29 billion by 2020, as per recent estimates. This isn't LG's only effort to establish itself as a supplier for the automotive market, as earlier this year the company also announced a partnership with NXP and HELLA Aglaia targeting the development of self-driving solutions. Likewise, LG and Honeywell recently started collaborating to protect future self-driving vehicles from hackers and malicious attacks, and LG Display is already a prominent car display supplier in an era that's seeing analog solutions being phased out in favor of digital gauge clusters, infotainment systems, and heads-up displays.