- BYD to use proceeds from placement to fund battery production
- China is encouraging the adoption of electric vehicles
BYD Co., the electric-car maker backed by Warren Buffett’s Berkshire Hathaway Inc., said a unit of Samsung Electronics Co. bought a 3 billion-yuan ($449 million) stake in the Chinese auto company.
Shanghai Samsung Semiconductor bought 52.3 million BYD shares at 57.4 yuan apiece in a private placement that raised 14.5 billion yuan in total from six investors, according to a statement to Shenzhen stock exchange. The fundraising will dilute billionaire Chairman Wang Chuanfu’s stake by about 1.9 percentage points to 18.8 percent.
Samsung pursued a stake in BYD after its affiliate was among foreign battery makers left off a list of suppliers approved by China, where sales of electric vehicles are surging and the government has sped up construction of charging points. The world’s largest maker of phones and memory chips said last week investing in BYD would bolster Samsung’s semiconductor business for cars.
BYD will use the proceeds from the placement to fund an expansion in battery production and research and development into new-energy vehicles, it said in the statement. China’s government wants sales of electric vehicles to exceed 3 million units a year by 2025, after surpassing the U.S. last year to become the global market leader.
Electronics makers like Samsung are vying for a slice of automotive sales as carmakers use more electronic sensors and displays in their push for more automated vehicles. For Samsung, the foray into the auto industry is also a way to help make up for declining growth in hardware businesses such as televisions and smartphones.
Samsung formed an alliance with Volkswagen AG’s Audi unit to provide memory chips for the company’s dashboard, infotainment and advanced driver assistance applications, the South Korea-based company said in November.
BYD fell 0.3 percent to HK$52.05 as of 10:03 a.m. in Hong Kong trading. Samsung declined 1.4 percent in Seoul.