Samsung to buy FläktGroup for €1.5 billion in AI sector play

The transaction, first reported by Bloomberg News, signals Samsung’s return to a more acquisitive mode, a shift intended to revive flagging growth across a business that spans chipmaking, appliances and smartphones.

Samsung Electronics Co. has agreed to buy FläktGroup Holding GmbH for €1.5 billion ($1.7 billion), acquiring the European heating and cooling specialist in its biggest overseas takeover in eight years.

The Korean company inked a pact to acquire all shares of the century-old German company from Triton Investments Advisers LLP. That deal should get done in 2025, it said in a statement. Samsung’s shares rose as much as 1.6% Wednesday morning in Seoul.

FläktGroup would help bolster Samsung’s position against rivals such as LG Electronics Inc. in the heating, ventilation and air-conditioning market, which is expanding rapidly alongside the need to cool data centers during the AI development boom.

The transaction, first reported by Bloomberg News, signals Samsung’s return to a more acquisitive mode, a shift intended to revive flagging growth across a business that spans chipmaking, appliances and smartphones. The FläktGroup deal is the company’s most significant acquisition since its $8 billion purchase of Harman International Industries Inc. in 2017.

“The move reflects a strategic bet on the accelerating growth of data centers,” said Greg Roh, an analyst with Hyundai Motor Securities Co. “It helps Samsung address a key gap in its portfolio, strengthening its position as it competes with major companies.”

FläktGroup was created in 2016 after private equity firm Triton acquired Fläkt Woods Group and merged it with DencoHappel to form a European leader in HVAC. The German company, which offers cooling solutions, has more than 60 large customers including data centers, pharmaceutical, biotech and food and beverage firms. It also serves large-scale facilities designed for batteries and electric vehicle components, according to Samsung’s statement.

Samsung has identified HVAC among its new growth pillars and has actively sought to buy assets. It was among the suitors for Johnson Controls International Plc but lost out to Robert Bosch GmbH last year. Last year, the Korean company formed a joint venture with Lennox International Inc. to strengthen its position in the North American HVAC market.

Samsung’s then-Chief Executive Officer Han Jong-hee said at an annual shareholder meeting in March that the company is pursuing M&A in HVAC, robotics and medical technology to diversify its business and capitalize on emerging opportunities.

The global HVAC market could reach $545.4 billion in 2034 from an estimated $310.6 billion in 2024, according to Global Market Insights Inc. Demand from data centers alone could grow 20% to 30% annually to as much as $20 billion by 2027, Bloomberg Intelligence analysts wrote, citing Omdia estimates.

“The growing intensity of thermal management is exponential as AI accelerates and large hyperscale and colocation sites represent a bigger portion of the market,” they wrote in April.

Citigroup Inc. acted as sole adviser to Samsung Electronics, while UBS Group AG advised Triton on the sale.