For push into automotive market.
Samsung Electronics has acquired Harman International in an $8 billion deal. The acquisition will allow Samsung to grow its presence in the connected market, particularly automotive electronics, which is projected to reach over $100 billion by 2025.
More than 30 million vehicles are currently equipped with Harman audio systems, including embedded infotainment, telematics, connected safety and security. Approximately 65% of Harman’s $7 billion of reported sales during the 12 months ended September 30, 2016 are automotive-related.
In a statement published by Samsung, the company said, “Harman’s experience designing and integrating sophisticated in-vehicle technologies, as well as its long-term relationships with most of the world’s largest automakers, will create significant growth opportunities for the combined business by enabling it to leverage Samsung’s expertise in connected mobility, semiconductors, user experience, displays and its global distribution channels.”
Samsung CEO and vice chairman, Oh-Hyun Kwon said, “Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time. Harman’s sustained track record of rapid growth fuelled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”
Samsung chief strategy officer and president, Young Sohn added, “The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade.”
Harman chairman, president and CEO, Dinesh Paliwal commented, “This transaction will deliver significant and immediate value to our shareholders and provide new opportunities for our employees as part of a larger, more diversified company. Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman’s technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers. We look forward to working together with Samsung to elevate experiences for consumers worldwide.”
Operating structure and leadership
Harman will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and Harman’s current management team. Samsung plans to retain Harman’s workforce, headquarters and facilities as well as its consumer and professional audio brands.
The transaction, which is subject to approval by Harman shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017.