Chinese electric-car maker BYD, which is backed by Warren Buffett’s Berkshire Hathaway, said that a unit of Samsung Electronics has purchased a stake worth $449m.
The Chinese auto company said in a statement that Shanghai Samsung Semiconductor bought 52.3 million BYD shares at a price of CNY57.4 per share in a private placement.
The auto maker raised a total of CNY14.5bn in the placement from six investors.
BYD’s fundraising program will reduce its chairman’s Wang Chuanfu’s stake by about 1.9% to 18.8%, Bloomberg reported.
A move by Samsung to acquire a stake in BYD comes after its affiliate did not figure in the list of foreign battery makers that were not approved as suppliers by China.
The stake purchase also comes in the wake of rapidly increasing sales of electric vehicles in China and its government’s accelerated efforts to build charging infrastructure.
BYD will utilise the funds raised from the placement to finance its expansion plans in battery production and research and development.
Content from our partners
The Chinese government aims to increase the sales of electric vehicles to more than 3 million units a year by 2025, after emerging as the world’s largest automobile market last year, overtaking the US.
Electronics manufacturers, including Samsung, are competing to gain a share in automotive sales as car manufacturers increasingly add electronic sensors and displays in their vehicles to make them more automated.
Samsung’s entry into the auto industry will also help the company to offset the declining sales in its hardware businesses such as televisions and smartphones, the publication reported.
In November last year, the South Korea-based Samsung announced a partnership with Volkswagen’s Audi to supply memory chips for the company’s dashboard, infotainment and advanced driver assistance applications.
In June, Samsung has agreed to acquire US cloud services provider Joyent for an undisclosed sum.
The deal will help Samsung build its own cloud infrastructure and gives the company its own platform to support mobile, Internet of Things (IoT) and cloud-based software and services.
