LG Electronics’ attempt to sell smartphone factories to Vingroup failed, Korea Times quoted a source familiar with the matter.
The reason is “Vingroup offers a lower price than expected from LG Electronics”.
“LG negotiated with Vingroup to sell smartphone factories in Vietnam and Brazil. However, the recent negotiations failed mainly due to price disagreements, ”the Korea Times today quoted a senior industry official who understood the deal.
Due to continuous losses in recent years, LG decided to sell the mobile phone segment to focus on other areas such as electric vehicle components. After LG’s announcement, Vingroup was mentioned as “a party wants to buy back” because the largest corporation in Vietnam plans to develop high-tech industries.
According to the official, LG will look for new buyers and no longer negotiate with Vingroup.
“Because Vingroup offers a lower than expected price, LG will find another buyer. In addition, overseas company’s smartphone production lines, such as Vietnam and Brazil, can be used to manufacture home appliances.
LG Electronics’ factory in Hai Phong, Vietnam. Photo: LG Electronics.
LG Electronics did not give up plans to sell off factories and retain patents and product designs. To minimize the impact of the restructuring, employees in LG’s smartphone segment will be relocated to other divisions, the official added.
The representative of LG Electronics reaffirmed that the company “leaves all possibilities open to the mobile phone segment”.
LG Electronics began to show its intention to withdraw from the mobile phone business a month ago, when the CEO said there would be a significant change in the company’s operations. LG Electronics is also said to have canceled plans to sell a “rollable” smartphone – which was launched at the Online Consumer Electronics Show in January.
A local media outlet reported LG apparently asked component suppliers – including Chinese display maker BOE – to halt development of rollable phones – to help switch from phones to a small tablet in seconds. In this regard, the representative of LG Electronics “did not comment”.
Despite efforts such as reorganizing production lines, LG’s mobile business has been losing money for 24 consecutive quarters since 2015 with accumulated losses amounting to 5,000 billion won ($ 4.5 billion).
Source: ndh.vn – Translated by fintel.vn