Samsung SDI is preparing to sell its 15.22% stake in Samsung Display, an asset estimated at approximately 10 trillion won ($6.9 billion). This strategic move aims to fund substantial investments in energy storage systems (ESS) and bolster the company’s financial stability in the face of a prolonged slowdown impacting the electric vehicle (EV) market and its related earnings.
The company announced on Thursday that it had informed its board of directors about the proposed sale of its Samsung Display stake. While details such as the potential buyer, the specifics of the deal, and the timeline remain confidential, the proposal is slated for review by the Sustainability Management Committee, which is composed of outside directors, before it is presented for final board approval.
Since its separation from Samsung Electronics in 2012, Samsung Display’s primary shareholder has been Samsung Electronics, holding an 84.78% stake. Samsung SDI possesses the remaining 15.22%.
This divestment is part of Samsung SDI’s strategic shift to navigate the changing market landscape. The company is focusing on reshaping its battery technology strategy, moving from premium nickel-based EV batteries towards more cost-effective lithium iron phosphate (LFP) cells. This pivot is driven by the increasing demand for ESS solutions, particularly in the context of the rapid expansion of AI data centers. Samsung SDI continues to invest in innovative technologies, including all-solid-state batteries, to maintain its competitive edge.
Last year, Samsung SDI reported 13.27 trillion won in sales revenue but experienced 1.72 trillion won in operating losses, primarily due to a decline in demand within the North American EV market.
Industry analysts suggest that Samsung SDI opted for a stake sale instead of a rights offering after facing significant shareholder opposition to its 1.65 trillion won rights issue in March of the previous year.
As the only non-Chinese manufacturer of prismatic batteries, Samsung SDI is actively diversifying its ESS product line, offering solutions ranging from the nickel-based SBB 1.7 to the LFP-based SBB 2.0. Simultaneously, the company is expanding its US production capacity for ESS batteries. Notably, Samsung SDI recently converted a portion of its EV battery production line at StarPlus Energy, its US joint venture with Stellantis, to ESS battery production.
Amid reports that Stellantis is considering withdrawing from StarPlus Energy due to a scale-back of its electrification strategy, sources indicate that the US automaker may sell its stake to either Samsung SDI or a third party. Should this transaction occur, Samsung SDI could potentially utilize the funds generated from its Samsung Display divestment to acquire Stellantis’ remaining 49% stake.
Furthermore, Samsung SDI intends to convert part of its Hungary-based plant to LFP battery production, including 46-millimeter cylindrical battery lines, to improve operational efficiency. The company is also accelerating the development of all-solid-state battery technology, collaborating with BMW for battery validation, with plans for production line expansions this year.
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