A very interesting rumor has been making its way online recently: tech giant Google might be interested in acquiring a part of electronics manufacturer LG.
Apparently, LG has been struggling to keep its business afloat lately, and this is no news. The company’s latest G4 flagship didn’t exactly bring the wow factor to the table and LG has seen disappointing sales for the product.
And now, the latest info coming out of Asia is saying that Google itself might be interested in purchasing a stake into the company.
According to industry sources, Google was said to be interested in paying up $2.15 / €1.96 billion for a 35% stake in LG Electronics via a block deal. A few days after the rumor started spreading online, an LG spokesperson quickly denied it saying that it was “just too preposterous to mention,” as reported by Business Korea.
The thing is, most shares in the company are owned by individual shareholders, except for the holding company and the National Pension Service, so a 35% block deal wouldn’t really fit into the cards.
Even so, the company’s situation is currently at a turning point. LG has been seeing slow demand for its G4 flagship, as we mentioned above, but also for its smart TV products. This poor performance has translated into a 50% sales decrease year-over-year.
Google and LG are no strangers to each other. The two companies have collaborated several times in the past in order to build Nexus devices, both tablets and smartphones. Actually, later this year, LG is expected to roll out the 2015 version of the Nexus 5.
On top of that, LG has signed a partnership agreement with Google for its premium “OLED TV” initiative, thus expanding things into a new direction.
All of these seem like good reasons for which Google might actually be interested in purchasing a stake in LG. This tidbit also makes sense to some officials from the industry.
“With LG Electronics’ business slump plausibly meshing with recently-strengthened cooperation with Google in the smart car sector, the rumor is spreading in a flash,” one such official was quoted as saying.
After seeing Microsoft acquire Nokia and Lenovo buying Motorola, we shouldn’t be that shocked if Google does eventually decide to acquire a big part of LG.