Samsung to acquire Harman for $8 billion
Korean giant, Samsung, is about to fork out $8 billion in cash on audio manufacturer, Harman, in its largest deal to date. Approximately 65 percent of Harman’s sales ($7 billion total over the last year) were for automotive-related products, and Harman provides roughly 30 million vehicles with connected car devices and audio systems worldwide. From a Samsung perspective, this deal will put the company on a more even playing field with rival brands like Google and Apple, both of whom have been advancing their respective automotive technology offerings.
According to Samsung Electronics' Vice Chairman and CEO, Oh-Hyun Kwon, Harman perfectly complements Samsung in terms of technologies, products, and solutions:
“Joining forces is a natural extension of the automotive strategy we have been pursuing for some time,” he insists.
Samsung will pay $112 per share – a healthy premium on Harman’s current share price of $87.65 - which brings the total value to around $8 billion. The deal will be completed in mid-2017, making Harman a standalone subsidiary of Samsung.
Harman Chairman, President, and CEO, Dinesh Paliwal, will continue to lead his firm, it has been confirmed:
“Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world,” Paliwal says.
This summer, Samsung invested $450 million into China-based electric car maker, BYD, which includes Warren Buffett’s Berkshire Hathaway Inc. among its investor base. Rumour has it that the company was also keeping an eye on Magneti Marelli, a manufacturing subsidiary of Fiat Chrysler.
Samsung says it plans to marry its own electronics division and expertise with that of Harman for audio — both on the consumer and professional side of the business — and connected devices (the Internet of Things / IOT).
Although IOT is currently a buzzword, Samsung claims that it plans to utilise Harman’s 8,000 developers to “deliver the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data, and devices.”