LG’s plan to sell its mobile phone business to vingroup failed because South Korean companies charged too much

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Tencent technology news on February 23: LG Electronics’s attempt to sell its mobile phone factory to Vietnam’s vingroup group group has failed because the Vietnamese company’s offer is lower than LG Electronics’s request, people familiar with the matter said on Monday.
“LG Electronics held talks with vingroup group on the sale of smart phone manufacturing plants in Vietnam and Brazil, but the talks broke down due to price analysis between the two sides,” the source said
It has been previously reported that LG Electronics of South Korea has approached Volkswagen and vingroup on the possibility of selling its smartphone business, but the buyer may be vingroup, which has expressed its intention to buy its smartphone business to LG Electronics. In the Vietnamese market, vingroup is second only to Samsung Electronics and oppo. The company is responsible for manufacturing mobile phones for LG Electronics in the form of ODM.
Due to the growing deficit in recent years, LG Electronics has sold its mobile phone business to the public to focus on other areas such as electric vehicle parts. After LG Electronics announced the sale of its smartphone business, vingroup was considered a “suitable bidder” for a possible deal, as vingroup, Vietnam’s most valuable listed company, has been seeking to expand into the high-tech industry.
According to South Korean officials, LG Electronics will no longer negotiate with vingroup group on the sale of its smartphone business, and will look for new buyers in the market. “As the price offered by vingroup group is lower than expected, LG Electronics will continue to look for another buyer. In addition, the company’s smartphone production lines overseas, such as Vietnam and Brazil, can be restructured to produce household appliances, “the source added.
However, LG Electronics did not abandon the plan to sell the factory, while retaining its intellectual property rights in mobile technology and product design. To minimize the impact of the restructuring, employees in LG’s smartphone Division will be reassigned to other departments, the person said. A spokesman for LG Electronics said: “the company is” setting aside all possibilities for mobile business. ”
A month ago, LG Electronics revealed its plans to launch a smartphone business. Previously, Kwon Bong Seok, CEO of the company, said that due to the increasingly fierce competition in the global smartphone market, LG Electronics should make the best choice and is studying various possible solutions for its future mobile business, including selling and reducing the business scale. After the launch of the latest rolling screen smartphone at the International Consumer Electronics Show (CES) in January this year, it was reported that LG Electronics had cancelled the launch plan of the mobile phone.
According to reports from South Korean media, LG Electronics has told its parts suppliers, including BOE, a Chinese display manufacturer, to suspend the development of its rolling screen smartphone project. The company initially planned to attract consumers’ attention with a rolling screen smartphone, which could be transformed from a smartphone into a small tablet in seconds. On the device, a LG spokesman added that “there is nothing to comment on.”
LG Electronics has been trying to revive its loss making smartphone business by reorganizing its product line, rapidly increasing outsourcing, and releasing smart phones of different shapes. However, since 2015, the business of LG Electronics has suffered operating losses for 24 consecutive quarters, totaling 5 trillion won (about US $4.5 billion).
Although LG Electronics’ smartphone business has been struggling, it has been gradually expanding its presence in emerging industries such as electric vehicles and auto parts. Last December, LG Electronics announced a joint venture with auto parts maker Magna International to produce electric motors. (compiled by Tencent technology / Wuji)