Samsung in Talks to Buy Modine as Data Center Cooling Stock Surges 29%

Samsung Electronics is in talks to acquire Modine Manufacturing, a U.S. supplier of data center cooling systems, Bloomberg News reported Thursday, setting off a sharp rally in Modine shares as investors weighed the possibility of a takeover.

Modine stock jumped 29% in extended trading following the report, and the company had a market capitalization of approximately $5.6 billion as of Thursday, putting a potential transaction in the multibillion-dollar range before any acquisition premium.

The companies are discussing a deal that could come together within weeks, Bloomberg reported, citing people familiar with the matter. However, no final decision has been made, and negotiations could collapse with another prospective buyer possibly emerging.

Reuters said it could not immediately verify Bloomberg's report and could not immediately reach either company for comment. No purchase price or financing terms were disclosed in the Reuters account.

The stock surge showed how quickly the prospect of a Samsung acquisition changed the market's valuation of Modine. However, the reported 29% increase represents a trading reaction, rather than an announced offer or a confirmed premium that shareholders would receive.

Modine closed Thursday's regular session at $106.10, and its shares had declined approximately 15% since November 3, following quarterly results that disappointed investors. The takeover report therefore arrived after a difficult stretch for the stock.

For Samsung, a successful acquisition would expand its presence in the equipment used to keep data centers operating at suitable temperatures. Cooling systems support the infrastructure behind cloud computing and artificial intelligence, giving suppliers a role in the buildout beyond the processors and memory chips inside servers.

Samsung has already pursued growth in that business. Bloomberg reported that the South Korean electronics company purchased Germany's FläktGroup for 1.5 billion euros last year, strengthening its thermal solutions offering. Buying Modine would represent a larger transaction, based on the American company's reported market value.

Modine, headquartered in Racine, Wisconsin, has also been expanding its manufacturing capacity for data center customers. On Wednesday, the company announced that commercial production of Airedale chillers had begun at a new facility in Grand Prairie, Texas.

The 682,000-square-foot plant manufactures 2-megawatt and 3-megawatt chillers for data centers. Modine said the facility supports customers including large cloud providers, colocation operators and high-density AI computing environments.

The company plans to have four operational 2-megawatt production lines at the plant by the end of its current fiscal year, subject to equipment commissioning, workforce readiness and other operational considerations. It also plans to expand from one shift toward a three-shift operation.