Park this one clearly in the wild rumours category! The Korea Herald reports that Google is looking to acquire a stake in LG. It is reportedly ready to spend KRW 2.5 trillion (about US$2.2 billion or C$2.8 billion) for a 35% stake in the company, part of a larger South Korean conglomerate. Such a move would make Google the company’s largest stakeholder but Google is apparently not interested in participating in the company’s management.
Google recently sold off its Motorola business to Lenovo after failing to return it to profitability (although it was making progress in that area). LG, a much larger company, not only manufactures smartphones but a wide range of consumer electronics. Acquiring a stake in the company without acquiring outright would presumably allow it to influence the company’s strategy without being directly responsible for its finances.
Assuming that the rumour is true for a moment, what would Google gain from such a move. It would certainly extend beyond any move to work again with LG on future Nexus devices. More likely it would be part of Google’s overall Internet of Things (IoT) strategy as it could use the company to showcase its vision for a world of interconnected electronics and appliances.
Despite LG quickly issuing a statement to deny the rumour, its stock shot up 14% earlier today before closing up 3.07 percent over the previous day.
Do you think there is any truth to these rumours of Google acquiring a stake in LG? Let us know below.
Sources : The Korea Herald // Phone Arena