LG takes over British fuel cell firm
LG Group has a reputation for being passive and tentative in merger and acquisitions (M&As). It remains to be seen whether the company’s acquisition of a well-known British fuel cell firm is an exception to this or a sign of previously-unseen ambition.
LG announced Thursday that it has acquired 51 percent of Rolls-Royce Fuel Cell Systems, a unit of the British technology and machinery giant. Fuel cells, which convert chemical energy from fuel to electricity, are being increasingly applied to consumer products, automobiles and power plants.
LG Electronics and LG Chem, the two key subsidiaries of technology-reliant LG, have been dabbling with low-power solutions and solar energy-related systems and group officials hope that Rolls-Royce Fuel Cell Systems will be a nice addition to the picture.
“We invested in Rolls-Royce because we expect a synergy between its fuel cell production technology and LG’s existing capabilities,” said an LG spokeswoman Kim Min-jeong.
“LG is planning to gain 15 percent of yearly revenues from green businesses by 2020, and we are stepping up efforts to find new businesses in the area. Fuel cells will become a one of many pillars of the vision.’’
Rolls-Royce Fuel Cell Systems will be blended into an LG unit dubbed LG Fuel Cell Systems, which is to focus on developing solid oxide fuel cell (SOFC). The technology creates more energy cheaply compared to phosphoric acid fuel cells and molten carbonate fuel cells.
The company plans to apply SOFC technology for industrial use and for hospitals, hotels and other large commercial buildings to build power plants smaller than the ones used.
LG recently established a task force focused on detecting opportunities in the energy sector, led by LG Electronics Vice President Chung In-jae.
Rolls-Royce, which sold its automobile business in 1970s and turned into an energy developing firm for private and military airplanes and ships have developed fuel cell technology in the past two decades.
Building smaller power plants that are more convenient to place in various locations such as household areas also saves more power and they are less likely to suffer blackouts, the company said.