Samsung is reportedly in talks to buy Modine, a $5.6 billion maker of AI data center cooling gear

Samsung Electronics is in talks to buy Modine Manufacturing, a Wisconsin company whose cooling equipment keeps AI data centers from overheating. Bloomberg reported the talks on Thursday, citing people familiar with the matter. Modine was worth about $5.6 billion at Thursday's close, and its shares jumped roughly 28% after hours.

No deal is confirmed. Both companies declined to comment, and the reports say the talks could still collapse or draw a rival bidder. Bloomberg's sources said an agreement could come within weeks.

For buyers and investors, the signal matters more than the terms. A chip giant wants to own the gear that sits beside the chips. That suggests cooling is now treated as a scarce, strategic part of the AI buildout, not a routine purchase.

Why a chipmaker wants cooling equipment

Every AI chip turns electricity into heat. As operators pack more chips into each server rack, ordinary air conditioning can't keep up. Modine sells chillers, which are large units that cool water for a whole building, plus liquid-cooling systems that carry coolant close to the chips.

Its results show how fast demand has grown. In the quarter ended September 30, Modine's data center sales rose 95% to $439.7 million, the company said. Operating profit in that unit rose 70% to $61.2 million. Bloomberg Intelligence estimates the unit has grown about 86% a year over the past three fiscal years.

Modine has also narrowed itself into a near-pure bet on this market. On October 1 it spun off its vehicle-parts business, which merged with Gentherm. Without that business, it expects revenue of $3.1 billion to $3.2 billion for the fiscal year ending March 2027, up 50% to 55%.

For Samsung, the appeal is steadier growth. Its profits still swing with memory chip prices, which rise and fall sharply. Analysts have long urged it to build AI-linked businesses that are less cyclical. In 2025 it bought FläktGroup, a large German heating and cooling maker, for €1.5 billion. Samsung said then it expected data center cooling to grow at double-digit rates each year through 2030.

Modine would add North American factories and customers, according to TradingKey. Modine says its data center growth comes mainly from North American hyperscale customers, meaning the largest cloud operators. It recently started making chillers at a new plant in Texas. In 2025 it announced a $100 million US expansion that included a new Dallas-area site.

What it could cost, and what's unproven

Bloomberg did not report a price. South Korea's Seoul Economic Daily estimated a full takeover at $7.5 billion to $8 billion, without citing a source. That assumes a premium of roughly 33% to 42% over Modine's market value. The paper said a price above about $8 billion would make it Samsung's largest acquisition, topping its 2017 purchase of the audio and car-electronics maker Harman.

Treat that range with caution. It is one Korean newspaper's estimate, not a disclosed offer. For scale, Samsung is worth about $910 billion after a 72% share gain this year, according to The Next Web.

The talks follow a weak stretch for Modine's stock. Its shares had fallen about 15% since its November 3 results disappointed investors. Its data center gross margin, the share of sales left after production costs, fell 4.7 percentage points to 19.7%. Modine blamed higher costs for materials, components and tariffs.

Net earnings fell 32% in the quarter. Modine tied the drop to a $29.5 million tax charge from restructuring for the spin-off. Adjusted earnings per share rose 27%.

A supply chain that is consolidating

The cooling supply chain is consolidating fast. Rival Vertiv bought PurgeRite for about $1 billion in December 2025 and has struck two more cooling deals this year. Japan's Daikin bought two cooling firms, Chilldyne and DDC Solutions, in 2025. A Samsung purchase would take another large independent supplier off the market.

Modine says it is signing long-term deals with key suppliers to secure critical components.

Bloomberg Intelligence called Modine's modest size, next to the big heating and cooling makers, an attraction for a buyer seeking vertical integration, meaning owning more steps of the supply chain.

Modine holds an investor day on November 18, where it plans to give longer-term revenue and earnings targets. No deal has been signed.