BMW Buys 15 Percent Stake in SGL
BMW Buys 15 Percent Stake in SGL
BMW announced on Thursday it had purchased a 15 percent stake in SGL Carbon SE, a company that manufactures carbon and graphite, considered key materials for the future of the automotive industry. BMW also indicated that there was a possibility it could purchase more shares in the future. SGL shares jumped over 7.5 percent on the news, bringing the value of BMW's stake to about $640 million.
BMW is the third major company to invest in SGL this year, following the lead of its rival Volkswagen AG, who purchased an 8.2 percent stake back in March. BMW's acquisition will likely fuel speculation that the two auto giants will battle for control of SGL. Based in Wiesbaden, Germany, SGL originally started out more than ten years ago making brake discs for carmakers such as Porsche AG. Now the company manufactures graphite composite plastics reinforced with synthetic fibers which automakers are beginning to look at as an alternative to steel or aluminum.
Despite BMW and Volkswagen's interest in SGL, only five percent of the company's sales in 2010 went to customers in the auto industry. The company also produces a variety of electrodes and cathodes for the metals industry, as well as furnace linings, in addition to its composite materials for the automotive and aerospace sectors. However, the company expects sales to the auto industry to increase dramatically in the next few years, as automakers look to increase the fuel-efficiency of their cars by making them of lighter materials.
SGL began a joint venture in 2009 with BMW to develop carbon fibers and fabrics for the auto industry, and is now considered the world's leader in these materials. These materials are vital to automakers' ability to build lighter vehicles yet maintain the same safety standards as cars built with more steel.
BMW announced on Thursday it had purchased a 15 percent stake in SGL Carbon SE, a company that manufactures carbon and graphite, considered key materials for the future of the automotive industry. BMW also indicated that there was a possibility it could purchase more shares in the future. SGL shares jumped over 7.5 percent on the news, bringing the value of BMW's stake to about $640 million.
BMW is the third major company to invest in SGL this year, following the lead of its rival Volkswagen AG, who purchased an 8.2 percent stake back in March. BMW's acquisition will likely fuel speculation that the two auto giants will battle for control of SGL. Based in Wiesbaden, Germany, SGL originally started out more than ten years ago making brake discs for carmakers such as Porsche AG. Now the company manufactures graphite composite plastics reinforced with synthetic fibers which automakers are beginning to look at as an alternative to steel or aluminum.
Despite BMW and Volkswagen's interest in SGL, only five percent of the company's sales in 2010 went to customers in the auto industry. The company also produces a variety of electrodes and cathodes for the metals industry, as well as furnace linings, in addition to its composite materials for the automotive and aerospace sectors. However, the company expects sales to the auto industry to increase dramatically in the next few years, as automakers look to increase the fuel-efficiency of their cars by making them of lighter materials.
SGL began a joint venture in 2009 with BMW to develop carbon fibers and fabrics for the auto industry, and is now considered the world's leader in these materials. These materials are vital to automakers' ability to build lighter vehicles yet maintain the same safety standards as cars built with more steel.
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