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Samsung Eyes Major Expansion into HVAC Market with $6 Billion Johnson Controls Bid

In its largest M&A move since Harman, Samsung Electronics vies for a leading position in the burgeoning HVAC industry
South Korea
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Samsung Electronics is making headlines with its aggressive bid to acquire the Heating, Ventilation, and Air Conditioning (HVAC) division of Johnson Controls, headquartered in Ireland, with an investment proposal valued at US$6 billion. This strategic move represents the tech giant’s most significant merger and acquisition (M&A) endeavor since the US$8 billion acquisition of Harman in 2017.

Foreign media reports, including insights from Reuters, highlight that Samsung has entered into competition with HVAC specialists such as Bosch and Lennox for the acquisition. Johnson Controls, with its rich history dating back to 1885, has established a robust footprint in the HVAC sector, boasting operations across more than 2,000 cities worldwide. The decision to offload its HVAC division earlier this year aims to pivot the company’s focus towards its burgeoning artificial intelligence (AI) smart building solutions business.

The HVAC market is currently under the spotlight, driven by escalating demand for energy-efficient air conditioning systems amidst the global push for decarbonization. According to market research by IBISWorld, the HVAC industry, presently valued at US$58.4 billion, is projected to climb to US$61 billion by 2028. While the market sees leadership from Japan’s Daikin Industries and China’s Midea Group, other contenders like Johnson Controls, Carrier, Panasonic, Samsung Electronics, and LG Electronics are also in the race.

Samsung’s potential acquisition of Johnson Controls’ HVAC division is seen as a strategic endeavor to amplify its global market presence, which has remained relatively minor despite previous expansions, such as the acquisition of American HVAC company Quietside in 2014. This acquisition could catapult Samsung into a leading supplier of HVAC solutions for both residential and commercial settings, marking a significant leap in its market positioning.

Insiders reveal a noticeable uptick in activity within Samsung Electronics’ M&A department since the year’s start, with a keen focus on sectors such as automotive electronics, robotics, and biotechnology. This latest bid for Johnson Controls signifies Samsung’s ambitious plans to diversify and strengthen its global presence across various industries.

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