LG Electronics announced Wednesday it was purchasing an 80 percent stake in Athom, a smart home platform firm. (LG Electronics)

LG Electronics is acquiring Athom, a smart home platform based in the Netherlands as part of its effort to strengthen connectivity for its open smart home ecosystem, the company announced Wednesday.

The Korean tech giant said it has acquired an 80 percent stake in the Dutch firm, and plans to purchase the remaining 20 percent within the next three years, with the condition included in the agreement.

“The acquisition of Athom is a cornerstone for our AI home business,” Jung Ki-hyun, executive vice president and head of LG’s Platform Business Center, said. “By leveraging the synergy between the two companies, we will expand our open ecosystem and external integration services, aiming to provide customers with more diverse and multidimensional space experiences.”

LG plans to integrate Athom’s extensive connectivity -- which links thousands of appliances, sensors and lighting devices -- with the generative AI-enabled LG ThinQ platform.

In LG’s AI home, customers will engage with generative AI, which will manage appliances and IoT devices to create a personalized environment tailored to their preferences, the company said.

Athom is a technology company that sells the smart home hub Homey, which connects with home appliances and IoT devices, and also offers cloud subscription services.

Founded in 2014, Homey has expanded primarily in Europe over the past decade, gaining a loyal customer base of hundreds of thousands of users. As of 2023, Homey devices are available in Australia, Singapore, the US and Canada, in addition to Europe.

The Homey App Store, managed by Athom, offers around 1,000 applications for connecting and controlling home devices from brands such as Philips Hue and Ikea. While many of these applications are based on official partnerships, a community of developers are also contributing to Athom's open platform to expand the range of brands and devices that can be connected to the hub.

"The acquisition of Athom is particularly noteworthy, as it will enable LG to incorporate third-party devices and services into its ecosystem," LG said.

Athom will continue to operate independently after the acquisition, in order to maximize the company's growth potential and unique strengths while fostering synergies in business, research and development capabilities, and platform utilization, LG added.

“LG is evolving into an intelligent space solutions company that connects and expands experiences in various living spaces," LG Electronics CEO Cho Joo-wan said.

"We will continue to make strategic investments to shift our business paradigm, as evidenced by our successive entries into platform-based appliance services and solutions such as the webOS advertising platform and AI home."

According to market research firm TechNavio, the global smart home market is projected to grow from $81.2 billion in 2023 to $260.24 billion by 2028, with an average annual growth rate of 26.23 percent.

By Jo He-rim (herim@heraldcorp.com)