LG Electronics will acquire a European premium hot water solutions specialized company. This is a move to enhance its portfolio in the heating, ventilation, and air conditioning (HVAC) sector, which is the core driving force of its B2B (business-to-business) operations.
On the 30th, LG Electronics announced that it has signed a contract to acquire 100% equity of the Norwegian hot water solutions company OSO. Founded in 1932, OSO primarily manufactures stainless water storage tanks and electric water heaters that store water heated by heat pumps or boilers. It holds the top market share in the European stainless water storage market and is recognized for proactively introducing automation in its manufacturing processes to secure quality and price competitiveness.
This acquisition is a strategic decision to capitalize on the growing European market by creating synergies with LG Electronics’ flagship product, the air source heat pump (AWHP). Recently, demand for heat pump systems that replace fossil fuels has surged in Europe due to greenhouse gas reduction policies and energy supply uncertainties. According to global consulting firm BRG Building Solutions, the European heat pump market is expected to grow from approximately 1.2 million units last year to 2.4 million units by 2030, roughly doubling in size over six years.
Water storage is essential for stable hot water supply through heat pumps. LG Electronics plans to offer customized products by combining its high-efficiency heat pumps with OSO's water storage tanks in an integrated package. Additionally, the two companies will work on expanding their product line by utilizing their technologies and expertise to develop integrated products that combine air source heat pump indoor units and water storage tanks, as well as heat pump water heaters.
Even after being acquired by LG Electronics, OSO plans to continue its independent operations based on its production bases in Norway and Sweden while also expanding its relationships with existing OEM companies.
This acquisition aligns with LG Electronics' company-wide strategy to expand its B2B operations. At the end of last year, LG Electronics established a new ES division to accelerate growth in the HVAC sector, targeting a growth rate that is twice as fast as the market in the clean tech area.
The ES division seeks growth through a '3B (Build·Borrow·Buy) strategy' similar to this acquisition. Specifically, it plans to actively promote its own capabilities through air solution research centers and HVAC academies (Build), collaborate on regional product development by forming consortiums with global universities (Borrow), and pursue mergers and acquisitions (Buy) to secure future growth drivers.
Lee Jae-seong, the head of LG Electronics' ES division (vice president), noted that 'OSO's hot water solutions are a key catalyst for LG Electronics' leap in its HVAC business' and said, 'The high-efficiency air conditioning solutions that combine the expertise of both companies will not only expand LG Electronics' market position but also contribute to advancing global electrification for a sustainable future.'
Sigurd Braten, the owner of OSO, said, 'LG Electronics’ differentiated high-efficiency heat pumps and OSO’s innovative water storage tanks create a perfect harmony and will provide customers with sustainable, high-quality solutions.'