LG Electronics, Equipped with Technology and Infrastructure, Acquires AtHome to Lead the AI Home Era

LG Electronics "Phase 1 of AI Home Construction"
Top Executives Reviewing Acquisition Since Early This Year
Connecting Over 50,000 Types of Appliances and IoT
Maintaining Independent Operating System and Brand
Expanding Scope to Automotive Electronics Business
Possibility of Additional M&A Related to Robots

LG Electronics' acquisition of Athom is interpreted as a foundation for the company's goal of opening the era of 'Artificial Intelligence (AI) Home' and achieving 'Intelligent Space Solutions.' The company described this acquisition as the 'first phase of building an AI home' and hinted at the possibility of additional M&A activities.

According to industry sources on the 3rd, LG Electronics conceived the AI home while transitioning into a software-centric company. The concept of 'AI Home' involves combining AI appliances and generative AI to provide services through various objects in the home, where customers spend most of their daily lives. The acquisition of Athom marks the starting point for LG Electronics to actively build the AI home ecosystem. LG Electronics plans to unveil the blueprint for collaboration with Athom at the International Consumer Electronics Fair (IFA) held in Berlin, Germany, from September 6 to 10 (local time).

Athom is regarded as a partner that can further expand the paradigm of the AI home that LG Electronics is currently developing. Athom is a smart home platform company with advanced technology and extensive infrastructure. Founded in 2014, it is now in its 10th year. Its flagship product is the smart home hub 'Homey,' which connects home appliances and Internet of Things (IoT) devices. The representative product, 'Homey Pro,' can connect to over 50,000 types of home appliances and IoT devices and supports various connection methods such as Wi-Fi, Bluetooth, Z-Wave, Matter, and Thread, making it highly popular among customers in Europe. Based on this, Athom has rapidly expanded its market not only across Europe but also in Australia, Singapore, the United States, and Canada, establishing its own smart home ecosystem. The Homey App Store operated by Athom reportedly hosts around 1,000 applications that connect and control products from world-renowned brands such as Philips and IKEA. The leading IT news outlet The Verge praised, "To create a smart home, a smart home hub, the 'brain,' is essential," and added, "Athom's hub is the most impressive among hubs supporting various connection methods and is the best choice to connect all devices into one sleek device."

LG Electronics plans to fully absorb and utilize the ecosystem that Athom has built over the past decade. To maintain the external influence that the brand has accumulated, Athom's operational system and brand will be kept independent. It is expected to have a positive effect on future additional businesses and research and development. Building on this, LG Electronics is likely to accelerate the realization of 'Intelligent Space' solutions, which expand the provision of AI appliances and smart solutions to various spaces such as automobiles. LG Electronics has recently been focusing on businesses related to various electronic devices (electronic components) that can be enjoyed inside automobiles, including installing high-performance displays inside vehicles. It is also enhancing synergy with the electric vehicle business. The company has set a goal to achieve sales of 20 trillion KRW in the automotive electronic components business by 2030 and to become one of the world's top 10 electronic component companies. Given Athom's experience in providing various smart solutions at home, it is expected to contribute to the automotive electronic components business as well.

It is reported that LG Electronics' top management, including CEO Jo Joo-wan, has been reviewing the acquisition of Athom since early this year. At the Consumer Electronics Show (CES 2024) held in Las Vegas, USA, in January, CEO Jo announced plans to invest 2 trillion KRW in M&A and said, "We are focusing on one or two companies."

Industry insiders expect LG Electronics to complete one or two more M&A deals within this year, not stopping at the acquisition of Athom. In particular, robot companies are being strongly mentioned. It is analyzed that the company will reap the fruits of its six-year effort in the robot business through M&A. LG Electronics established the Robot Business Center in 2018, reorganized the organization into the BS Business Division's Robot Business Team in 2020, set up an overseas sales organization in 2022, and established an in-house independent company (CIC) under the BS Business Division last year, expanding the scale of its robot business. In January, CEO Jo also stated, "We are open to the possibility of equity investment or M&A in promising robot companies." From this month, the company has announced that it will fully launch the 'CLOi Robot Subscription Service.'