Korean electronics giant Samsung has acquired connected car technology provider Harman International Industries, in a cash deal worth approximately $8bn (6.3bn).
In the 12 months to 30 September 2016, Harman made sales worth approximately $7bn, of which 65% was motor related. Harman also offers audio, professional and non-auto connected products and services.
Explaining why Samsung chose to make the purchase, the company wrote it would immediately give Samsung a significant presence in the market for connected technologies, particular automotive electronics – which it said was a strategic priority for Samsung.
It added Harman’s experience designing and integrating sophisticated in-vehicle technologies, and its long term relationships with manufacturers presented an opportunity for the company.
Young Sohn, president and chief strategy officer of Samsung Electronics said: “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.
“We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow. Working together, we are confident that Harman can become a new kind of Tier 1 provider to the original equipment manufacturers by delivering end-to-end solutions across the connected ecosystem.”
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Once the deal has been fully approved, Harman will operate as a standalone Samsung subsidiary, and will continue under its current management team, led by current chairman, president and chief executive officer Dinesh Paliwal. Samsung said it intends to retain Harman’s work force, headquarters and facilities.
The transaction is still subject to approval by Harman shareholders, regulatory approvals and other customary closing conditions. It is expected to close in mid-2017.