Samsung Electronics buys $450 million stake in Chinese electric car firm BYD

The logo of Samsung Electronics is seen at its headquarters in Seoul, South Korea, July 4, 2016. Picture taken on July 4, 2016.

Reuters/Kim Hong-Ji

Samsung Electronics (005930.KS) is to pay 3 billion yuan ($450 million) for a stake in Chinese automaker and rechargeable batteries firm BYD Co Ltd (002594.SZ) (1211.HK), the Chinese company said in a stock exchange filing on Thursday.

Automakers and technology companies have formed a series of partnerships in recent years as the race to develop electric, self-driving, internet-connected vehicles has created demand for more electronics components and software.

The Samsung investment has been made through Chinese subsidiary Shanghai Samsung Semiconductor and gives the Korean firm a 1.92 percent stake in BYD, making it the ninth largest investor in the company.

Samsung Electronics said last week it was in talks to acquire a stake in BYD to boost its automotive chip business, after the Korea Economic Daily first reported that Samsung had agreed to buy a stake.

BYD, which also counts Warren Buffet’s Berkshire Hathaway (BRKa.N) as a backer, began as a battery maker for personal electronics before launching its automotive business that focuses on electric and hybrid vehicles.

A total of six investors bought BYD shares in a placing at 57.40 yuan per share, a discount to Thursday’s closing share price of 61.94 yuan.

The 14.5 billion yuan private placement also included investments by CCB Principal Asset Management, China Life AMP Asset Management, Aegon-Industrial Fund Management and Essence Fund.

($1 = 6.6720 Chinese yuan renminbi)

(Reporting by Jake Spring in Beijing and Hyunjoo Jin in Seoul; Editing by Greg Mahlich)