Is Google Set To Buy 35% Of LG Electronics?
Late today LG Electronics who makes smartphones and supplies display screens for Google devices denied categorically that a key stake in the Company was are set to be acquired by Google.
On the 22nd, a rumour that Google will buy 35% of LG Electronics’ stake spread in industry and stock market.
Share in LG skyrocketed 14.5% as the rumour spread.
The shares were tipped to be acquired through a block-deal (off-hour block trading).
The Korean Times reported late this afternoon that as the rumour spread some said that that Google will acquire its stake not through M&A, but 3rd person assignment of shares in the Company.
LG Group has formally denied the rumour that started in the USA.
Last year LG and Google tightened their Android alliance via a “long-term patent cross-licensing agreement” covering both existing and future products.
In a statement released on LG’s website, at the time the Korean company confirmed that the agreement would cover “a broad range of products and technologies” and would apply to all existing patents as well as patents filed over the next 10 years — a significant timeline in terms of product releases.
In a statement, Executive Vice President and Head of LG Electronics’ Intellectual Property Centre JH Lee joined Google in praising the partnership, saying it would build on a long-standing alliance between the two companies.
“LG values its relationship with Google, and this agreement underscores both companies’ commitment to developing new products and technologies that enhance consumers’ lives,” he said.
Google Deputy General Counsel for Patents Allen Lo was similarly effusive.
Prior to the Google rumour surfacing LG Electronics stock price had fallen significantly due to weakening profits.
Shares of LG Electronics dropped 4.84 percent on Monday from the previous day to close at 47,150 won.
This was the lowest figure since June in 2003 when the figure hit 46,400 won. The market value also dropped to 7.7 trillion won, down by 1.5 trillion won from the previous month.
The company’s sales in the first quarter of this year stood at 13.9 trillion won, which is similar figure to last year but its operating profit dropped by 36.2 percent to 305.2 billion won. Its net income dropped to 38.4 billion won from 92.6 billion won during the same period.
Prior to the rumour analysts were revising down the target share price of LG Electronics in the latter half of this year, claiming that sluggish sales of the firm’s flagship products smartphones and televisions were impacting the business.