SEOUL, South Korea (AP) — LG Electronics Inc. said Thursday it will acquire Austrian-based automotive light maker ZKW in the company's biggest acquisition as its seeks a bigger share in the automotive components market.
The South Korean company said it plans to buy a 70 percent stake in ZKW Holding, a supplier to BMW and Mercedes-Benz, for 1.4 trillion won ($1.3 billion; 1.1 billion euros). Its holding company LG Corp. will purchase the remaining stake for 330 million euros ($402 million).
LG is banking on its automotive parts business to get a stronger foothold in the market. LG said the purchase of ZKW, which makes high-quality lights for top automakers around the world, will enhance its auto parts business portfolio.
The South Korean company said the acquisition will also help develop advanced automotive lighting for self-driving cars and next-generation automotive lighting.
Separately, LG Electronics said its January-March net profit fell 13 percent over a year earlier to 729.9 billion won ($676.4 million) on sales worth 15.1 trillion won ($14.1 billion). Operating profit jumped 20 percent over a year ago to 1.1 trillion won ($1.03 billion).
While its mobile business posted a loss of 136.1 billion won ($126.9 million) during the first quarter, its high-end home appliance products and OLED TVs drove profit growth in LG's two key divisions. Its TV division in particular saw a 77 percent jump in operating income over a year ago thanks to strong demand for high-end TVs made of OLED panels and cheaper component costs.