South Korea’s LG Electronics reportedly intends to sell off its smartphone business to Vietnam’s conglomerate Vingroup, according to South Korea’s media.
| LG Electronics intends to sell off smartphone business to Vingroup. Photo: Vingroup |
The South Korean brand is considering all options for its loss-making mobile division that could include closing or selling off its business, according to Reuters in Seoul. The brand would be focusing resources on premium home appliance and automotive electronics.
Possible buyers are Vietnamese conglomerate Vingroup, Facebook, Volkswagen and Google, and Vingroup is one of the strong acquisition candidates, according to NewDaily.
Vingroup, with a market capitalization of US$16.5 billion as of the end of 2020, accounts for 14% of the total market capitalization of Vietnamese listed companies. The group is operating in diverse business areas, including hotels and tourism, real estate, distribution, construction, automobiles, and mobile phones.
VinSmart, Vingroup’s subsidiary, entered Vietnam’s smartphone market in 2018. It has been producing smartphones under an original design manufacturing (ODM) contract with LG Electronics. Although it hasn’t yet had a strong presence in the global smartphone market, in Vietnam, VinSmart's smartphone outstripped Apple’s iPhone to reach the third place in terms of market share after Samsung and Oppo.
Newspim reported that LG Electronics’ sales network, research & development center, Brazil-based production plant attract VinSmart for its expansion. LG Electronics' share in the North American smartphone market was 12.9% in 2020, according to Strategy Analytics.
Until now, Vingroup has no comment on this. However, the group also revealed it will export 5G-enabled smartphones to the US this year. Last September, its subsidiary VinSmart exported the first batch of smartphones to this market and planned to assemble nearly two million units for its partner in 2021.
