Samsung buys Harman for $8 billion
Samsung Electronics today announced that it has agreed to buy Harman International Industries for $112 per share in cash which amounts to a total equity value of around $8 billion. This acquisition will give Samsung a major presence in the rapidly growing market for connected technologies, particularly automotive electronics, which remains a strategic priority for Samsung. Harman leads the market in connected car solutions. Almost 65 percent of its reported sales during the 12 months ended September 30, 2016 are related to the automotive industry.
“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,” said Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics.
Harman has significant experience in designing and integrating sophisticated in-car technologies and it already has deep relationships with some of the largest car manufacturers in the world. Samsung says that this will create big growth opportunities for the company when combined with Samsung’s expertise in connected mobility, user experience, semiconductors, displays and its global distribution channels. Moreover, Samsung’s leading position in consumer electronics coupled with Harman’s brands and audio capabilities will provide improved customer benefits and elevate user experiences across Samsung’s entire portfolio of consumer and professional products.
This acquisition will provide Samsung with access to Harman’s 8,000 software designers and engineers who are working on unlocking the IoT market’s potential. The company will also get access to Harman’s leading brands and state-of-the-art audio systems including Harman Kardon, JBL, Mark Levinson, AKG, Lexicon, Revel and Infinity. Harman also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive use. Samsung says that these brands will greatly improve the competitiveness of its mobile, display, virtual reality and wearable products as it will be able to provide a fully differentiated audio and visual experience to its customers.
Once this deal is closed, Harman is going to operate as a standalone Samsung subsidiary and will continue to be led by the existing team. Samsung says that it plans to retain Harman’s workforce, facilities, headquarters as well as all of its consumer and professional audio brands. This transaction is subject to approval by Harman’s shareholders and regulators, Samsung expects it to close by mid-2017.