Vingroup fails to acquire LG Electronics smartphone business
10:54 | 23/02/2021 Print Article
Vingroup is unlikely to be able to realise its ambition to take over LG Electronics’ smartphone manufacturing business.
|Vingroup and LG have been negotiating since January |
LG Electronics' recent discussions to sell its mobile phone factories to Vingroup fell through as the Vietnamese conglomerate's bid did not match the South Korean company’s expectation, according to information from Korea Times.
"LG had been negotiating with Vingroup to sell its smartphone-manufacturing facilities in Vietnam and Brazil, however, the discussions recently collapsed mostly due to different price expectations," said an industry insider familiar with the matter.
Last month, the Asian media was in a huge stir over the rumoured take-over deal between Vingroup and LG Electronics, the fourth biggest “chaebol” in South Korea.
Accordingly, Vingroup has emerged as the most potential bidder to acquire LG Electronics’ smartphone production line as an important milestone for the Vietnamese group to penetrate the US.
LG reportedly aims to withdraw from the smartphone business due to difficulties, with intentions announced around a month after CEO Kwon Bong-seok said there would be a significant change in operations. The mobile communications business has witnessed losses of around $4.5 billion since 2015.
If the negotiation process is successful, Vingroup could take advantage of LG Electronics’ reputation, innovation, and sales network.
However, with the two sides unable to agree on a mutually acceptable valuation, LG will move on to find another buyer. Also, the company's smartphone production lines in Vietnam and Brazil can be realigned to manufacture home appliances, noted an official from LG Electronics.
He also added there would be no more negotiations with Vingroup, and LG would seek a new buyer, according to Korea Times.