Does Samsung Own LG in 2024? A Deep Dive into the Tech Rivals
As two of the largest consumer electronics brands in the world, Samsung and LG are often compared against each other. This leads many to wonder – does Samsung own LG? Or are the two competitors completely independent? I analyzed the origins, ownership structures, and competitive moves of these tech giants to find out.
The Origins and Rise of Samsung and LG
Samsung‘s beginnings trace back to 1938 when founder Lee Byung-chul started an export business in Taegu, Korea trading noodles and other goods. This small company would later become Samsung Corporation (Samsung means "three stars" in Korean).
In 1969, Samsung Electronics was established as a subsidiary focused on electronics and home appliances. It‘s first product was a black and white TV.
Over the next few decades, Samsung Electronics grew rapidly to become the crown jewel subsidiary of the larger Samsung conglomerate it is today. Some key milestones:
- Early 90s – Samsung begins producing DRAM memory chips, growing into the world‘s largest memory chipmaker
- 2010s – The Galaxy smartphone series propels Samsung to the #1 spot in worldwide mobile phone sales
- 2020 – Samsung reaches over $200 billion in annual revenue with strong semiconductor, mobile, and consumer electronics divisions
In contrast, LG began as Lak-Hui Chemical Industrial Corp in 1947 and was renamed Lucky-Goldstar in 1983 before becoming LG. It forayed into electronics via radio manufacturing in 1958 before expanding into TVs, refrigerators, washing machines and other home appliances.
Like Samsung, LG also grew rapidly in the 1980s and 90s through acquisitions and establishing subsidiaries globally. Today, LG boasts over $50 billion in annual revenues from its robust electronics, chemical, and telecom divisions.
While the two Korean conglomerates have distinct origins, their paths converged with fierce competition across electronics segments.
Ownership: No Overlaps Between the Giants
Samsung operates under a byzantine structure with over 20 affiliated businesses including Samsung Electronics, Samsung Heavy Industries, and Samsung Life Insurance.
The Lee family holds significant ownership and control over the central Samsung companies like Samsung Electronics. As per Bloomberg, Lee Jae-yong, son of former chairman Lee Kun-hee owns about 4.18% of Samsung Electronics shares worth over $5 billion. His sisters Lee Boo-jin and Lee Seo-hyun also hold small stakes.
Overall, the Lee family members collectively control about 5.8% of Samsung Electronics – giving them outsized voting rights and control due to complicated shareholding arrangements involving circular holdings between Samsung Group companies.
In contrast, LG is controlled by the Koo family which owns about 16% of LG Corporation – the holding company parent of LG Electronics and other subsidiaries. Koo Kwang-mo is the largest shareholder and current chairman of LG.
The key point is that the Lee and Koo families control their respective empires separately with no crossover ownership between the Samsung and LG affiliates.
Financial Snapshot of the Tech Rivals
| Company | Market Value | Revenue (2022) | Profit Margin | R&D Spending |
|---|---|---|---|---|
| Samsung Electronics | $284 billion | $197 billion | 19% | $18 billion |
| LG Electronics | $10 billion | $55 billion | 4.6% | $4.5 billion |
The table above further highlights how Samsung is the much larger company selling consumer electronics and components. With over 3X the revenues of LG and a market cap that is 30X larger, Samsung is the dominant force financially.
However, both companies invest heavily in R&D to develop new display technologies, home appliances, batteries and other innovations. The capital intensity leads to lower single digit profit margins, despite the high revenues.
Competitive Strategies: Contrasting Approaches
With no common ownership, Samsung and LG are intense rivals employing different strategies:
Samsung
- Flooding market with waves of new Galaxy smartphones to counter pricing pressure
- Massive marketing budget exceeding $15 billion annually
- Vertical integration with in-house manufacturing of displays, memory chips and other components
- Aggressively pricing to gain market share across segments like TVs
LG
- Narrower focus on premium home appliances and TVs
- Pioneering technical innovations like OLED TV displays
- Licenses technologies and patents to other companies rather than competing across every segment
- Brand positioning centered on product quality and performance
Samsung‘s multifaceted approach has won over consumers, granting it larger market shares in areas like smartphones. However, LG‘s focus has allowed it to deliver standout products like its market-leading OLED TVs.
The varied strategies illustrate how the rivalry forces each company to play to its strengths.
Verdict: Samsung Does Not Own LG in 2024
In closing, my in-depth analysis into the origins, ownership structure, finances, and competitive moves of Samsung and LG confirms that Samsung does not own LG in 2024. The two Korean conglomerates are independently run entities controlled by the Lee and Koo families respectively.
While they compete across segments like consumer electronics and home appliances, they have very different DNA and strategic approaches. Samsung‘s mass market model has fueled incredible growth making it the far larger and more valuable company. But LG‘s focus on technical innovation has allowed it to excel in niche areas like high-end TVs.
Going forward, this rivalry will continue to shape the consumer tech landscape. However, the ownership will remain separate barring any unexpected merger overtures.
