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Samsung Electronics Puts $450 Million Into Chinese Electric Car Company BYD

Inside BYD Co.'s Vehicle Assembly Plant and HeadquartersInside BYD Co.'s Vehicle Assembly Plant and Headquarters
Employees assemble brake pads for BYD S6 sport-utility vehicles at the company's assembly plant in the Pingshan district of Shenzhen, China in 2014.Photograph by Brent Lewin — Bloomberg via Getty Images

Samsung Electronics is to pay 3 billion yuan ($450 million) for a stake in Chinese automaker and rechargeable batteries firm BYD, the Chinese company said in a stock exchange filing 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 (SSNLF) investment has been made through Chinese subsidiary Shanghai Samsung Semiconductor and gives the Korean firm a 1.92% stake in BYD (BYDDY), 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.

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BYD, which also counts Warren Buffet’s Berkshire Hathaway 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.