Samsung in Talks to Acquire Data Center Cooling Maker Modine; MOD Surges Over 25% Pre-Market

TradingKey - Samsung Electronics is in talks with U.S. data center cooling equipment maker Modine Manufacturing over a potential takeover deal that could be reached as soon as the coming weeks, Bloomberg reported, citing people familiar with the matter. Following the news, shares of Modine Manufacturing (MOD) surged over 25% in premarket trading on Friday.

Source: TradingView

Neither party has made a final decision, talks could still fall apart, and the emergence of other suitors cannot be ruled out. Both Samsung Electronics and Modine Manufacturing declined to comment on the reports.

Modine Manufacturing's emergence as a potential takeover target is primarily driven by rapidly growing cooling demand in artificial intelligence data centers. As AI server power consumption and rack densities continue to rise, traditional air-cooling equipment is struggling to meet the heat dissipation requirements of some large data centers, elevating the importance of chillers, liquid-cooling systems, and other high-efficiency thermal management solutions. Modine Manufacturing currently supplies such equipment to North American hyperscale cloud customers, and its data center business has become its fastest-growing segment.

In the quarter ended late September, Modine Manufacturing's data center revenue reached $440 million, up 95% year-over-year, while operating profit grew 70% to $61.2 million. Impacted by rising costs for materials, components, and tariffs, the segment's gross margin declined by 4.7 percentage points to 19.7%, though orders and backlogs remained strong. The company expects that, excluding the spun-off businesses, core revenue in fiscal 2027 will grow 50% to 55% year-over-year.

Modine Manufacturing completed the spin-off of its Performance Technologies business in October and merged it with Gentherm. Following the restructuring, the company retained its data center and commercial HVAC businesses, further sharpening its operational focus on high-growth thermal management markets. The company also received a cash distribution of approximately $156 million, which it used to pay down debt. Structurally, Modine Manufacturing has transformed from a diversified industrial components company into a more pure-play provider of data center cooling and climate solutions, which has also enhanced its appeal as an M&A target.

For Samsung, the potential acquisition would add a new stream of data center revenue beyond memory chips. Although Samsung generates substantial cash flow from its memory business, its profitability remains vulnerable to chip price cycles. Combining server chips and storage products with data center thermal management equipment would help the company expand its presence in the AI infrastructure market and reduce its reliance on a single business.

Samsung has previously strengthened related capabilities through acquisitions. In 2025, the company spent €1.5 billion to acquire German HVAC company FläktGroup, expanding its data center cooling solutions. Acquiring Modine Manufacturing would provide Samsung with additional North American customer relationships, manufacturing facilities, and high-power cooling products, potentially accelerating synergies with its own semiconductor and server businesses.