OSO Stainless Steel Water Storage Ranks No. 1 in Europe
Adding Hot Water to HVAC Systems to Target the European Market
"Combining Both Companies' Expertise for Synergy" and Portfolio Enhancement
LG Electronics has made a bold move by acquiring OSO, a Norwegian company renowned as Europe's leading 'hot water solution' provider, through a strategic investment. The company aims to maximize synergies in its heating, ventilation, and air conditioning (HVAC) business, which is considered a key driver of its business-to-business (B2B) operations, and to further enhance its portfolio targeting the European market.
On June 30, LG Electronics announced that it had acquired 100% of the shares of OSO, a European premium hot water solution company. Since its founding in 1932, OSO has operated its business with a focus on the heating market, encompassing heating and hot water. In particular, OSO holds the number one market share in Europe in the stainless steel water storage segment.
OSO booth view at 'ISH 2025,' the world's largest heating, ventilation, and air conditioning exhibition held earlier this year in Frankfurt, Germany. LG Electronics
This acquisition is a strategic move by LG Electronics to further expand its business by leveraging the synergy between its high-efficiency heat pump HVAC systems, which are its main focus in the European market, and OSO's hot water solutions.
Recently, in Europe, there has been a growing demand for 'air-to-water heat pump (AWHP)' HVAC systems that use the thermal energy of outside air to provide indoor heating, cooling, and hot water, instead of fossil fuels. This trend is driven by greenhouse gas reduction policies and uncertainties in energy supply. 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.
In Korea, gas boilers, which are mainly used, supply heating and hot water through a 'direct heating' method. In contrast, heat pumps require the installation of a water storage unit to ensure a stable supply of hot water.
LG Electronics plans to offer integrated packages of heating, cooling, and hot water solutions, providing optimal products tailored to customer needs. The company aims not only to further expand its influence in the European HVAC market but also to accelerate growth by incorporating hot water solutions across its global HVAC business.
By combining its existing technologies and research and development (R&D) capabilities related to heat pumps with OSO's product strengths, LG Electronics will expand its lineup to include integrated products combining AWHP indoor units and water storage, as well as heat pump water heaters. Synergies in network and infrastructure are also expected to contribute to the company's efforts to target the European market.
Water storage units are mainly made from enamel and stainless steel. While enamel materials were previously mainstream, recently there has been a growing preference for stainless steel products due to their superior hygiene and corrosion resistance. OSO's stainless steel water storage units boast higher energy efficiency and lower heat loss compared to similar products from other companies on the market. OSO has already established itself as a market leader in Europe, driving market expansion.
In particular, OSO has production bases in Norway and Sweden, enabling stable product supply to the European market. The proactive introduction of automation in its manufacturing processes has also contributed to the superior quality and price competitiveness of its products. LG Electronics plans to allow OSO to continue operating its independent hot water solution business after the acquisition, while strengthening relationships with existing original equipment manufacturers (OEMs) and expanding the business.
This acquisition demonstrates just how committed LG Electronics is to the HVAC business, which it has identified as a future growth engine.
At the end of last year, LG Electronics established the ES Business Division to focus on growing its HVAC business. With the goal of achieving 'compressed growth' at twice the market rate in the cleantech sector, the company offers comprehensive air solutions optimized for various spaces, including residential and commercial air conditioners and large-scale chillers.
To proactively respond to new growth opportunities such as the rapidly increasing demand for artificial intelligence (AI) data center cooling systems, nuclear power plants, and mega-factories, LG Electronics is leading the digital transformation of the HVAC industry by utilizing AI technology.
In particular, LG Electronics is pursuing the so-called '3B strategy'?Build, Borrow, Buy?to accelerate the expansion of its B2B business through HVAC. This strategy refers to: ▲Strengthening technological capabilities and human resources through the Air Solution Research Center and HVAC Academy (Build) ▲Expanding product development cooperation by forming consortia with major global universities to address climate and regional needs (Borrow) ▲Seeking mergers and acquisitions to secure additional growth drivers (Buy).
Lee Jaesung, Executive Vice President and Head of the ES Business Division at LG Electronics, stated, "OSO's hot water solutions are a key catalyst for LG Electronics' leap forward in the HVAC business. The high-efficiency air solutions created by combining the expertise of both companies will not only expand our market position but also accelerate global electrification for a more sustainable future."
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