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

July 21, 2016, 11:44 AM UTC
Inside BYD Co.'s Vehicle Assembly Plant and Headquarters
Employees assemble brake pads for BYD Co. S6 sport-utility vehicles (SUV) at the company's assembly plant in the Pingshan district of Shenzhen, China, on Tuesday, Aug. 5, 2014. Photographer: Brent Lewin/Bloomberg via Getty Images
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.