LG Energy acquires NEC Energy Solutions

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SEOUL, Feb. 18 (UPI) — South Korea’s electric vehicle battery maker LG Energy Solution announced it had acquired a 100% stake in NEC Energy Solutions, a U.S. grid battery integrator.

A subsidiary of Japan’s NEC Corp., NEC Energy Solutions is regarded as one of the leading players in the energy storage system business.

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An ESS refers to equipment that stores and manages energy for more efficient usage. The ESS market is expected to grow quickly over the next decade.

Korean consultancy SNS Research recently predicted that the global ESS market size will expand by an average of 35 percent a year, from 20GWh in 2020 to 302GWh in 2030.

NEC Energy Solutions saw an average growth of about 60% since 2018, recording revenues of $207 million in 2020. However, NEC announced its sudden exit from the industry in 2020.

The financial terms of the deal, announced Thursday, were not disclosed. But industry watchers expect that the amount will be in the tens of millions.

This marks the first merger and acquisition by LG Energy Solution since it branched off from LG Chem in late 2020. The former raised more than $10 billion through its listing last month.

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“Through the deal, LG Energy Solution will accelerate its energy storage business and ultimately better provide our clients with a more comprehensive ESS program that meets growing demand,” LG Energy Solution CEO Kwon Young-soo said in a statement.

“We are confident we can expand on the ESS business by escalating our competitiveness in terms of quality and ultimately become a leading global player within the industry,” he said.

Experts point out that LG Energy Solution is keeping its eyes on the new ecosystem in the energy business.

“LG Energy Solution is a global powerhouse in manufacturing batteries. But it hopes to have an end-to-end system to pre-empt the future market,” Daelim University automotive Professor Kim Pil-soo told UPI News Korea.

“Toward that end, LG Energy Solution needs the experiences and capabilities of an ESS company. Hence, its purchase of NEC Energy Solutions appears to be the right decision,” he said.