September 11, 2008

Will LG start its solar energy business by acquiring Conergy?

In order to start its solar energy business, South Korea’s second largest electronics producer, LG Electronics Inc. (SEO:066570) is planning to buy up the solar cell unit of Conergy AG (FRA:CGY), the second largest solar company of Germany.

LG Electronics spokeswoman told Reuters that the company is planning to start its solar energy business and it is studying the market and considering various options but it does not have any acquisition plan.

LG Electronics and Samsung Electronics Co., Ltd. (SEO: 005930) are two of the biggest electronics producers of South Korea and both the companies gave up external take over in favor of “organic growth.” LG’s last took over Zenith, a US-based electronics company, in 1995.

LG revealed its interest to enter into the solar energy industry in May 2008. LG CEO said that his company was reviewing various options. On September 4, 2008, The Maeil Business Newspaper said that the buy up of the Conergy solar unit was “imminent.” The take over will cost LG $183.3 million.

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