Watch out Apple and Google, there is another tech company willing to get itself involved with the auto industry. Samsung, the South Korean mobile phone company is reportedly making a move to acquire Magnetti Marelli, a car parts maker under Fiat Chrysler.
Bloomberg reports that Samsung is currently in talks to buy either some or all of Magnetti Marelli's business. The outlet's source noted that Samsung is interested in Magnetti Marelli's telematics, lighting, and in-car entertainment components divisions. If the deal pushes through, the acquisition of Magnetti Marelli's could be Samsung's biggest outside of its native South Korea. Insiders believe that the deal is likely to close this year.
This is not the first time Samsung is delving into the auto industry. Although the company is best known for its smartphones and slates, Samsung assembled a team of auto components, autonomy, and electronics experts as early as December. In addition, the South Korean Galaxy 7 maker also bought a stake in Chinese carmaker BYD for $451 million.
Vice Chairman Lee Jae Yong, 48, widened the scope of the conglomerate by selling off assets and streamlining Samsung's business to weather the downturn in the smartphone industry and ease its reliance on consumer electronics.
In 2009, Magneti Marelli and Samsung collaborated to develop several display products. Samsung's advanced lighting solutions may offer innovative light sources to luxury car drivers. Meanwhile, Magneti's long-established navigation, in-car entertainment, and telematics provide advanced in-vehicle security features.
Since the potential deal between supplier Magneti Marelli and Samsung hit the news, Fiat Chrysler's stock spiked to 8.9%, a welcome change from the automaker's disappointing July sales figures. Although Fiat Chrysler's CEO Sergio Marchionne admits that the company is dependent on Marelli in terms of the development of their portfolio, there will be a time when Fiat Chrysler will no longer rely on Marelli as an internal supplier.