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Samsung announced on Monday that it will buy audio product maker Harman. The smartphone vendor will acquire the company for $112.00 per share in cash, with the deal expected to close in mid-2017.
In addition to its professional and hi-fi audio products sold under a number of brands including AKG Acoustics, Harman Kardon and JBL, Harman has a big stake in connected car tech, with products used in more than 30 million cars worldwide.
The Korean tech giant has made it clear that its interest in Harman stems from a desire to expand further into this area. Young Sohn, president and chief strategy officer at 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 specialised 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 OEMs by delivering end-to-end solutions across the connected ecosystem.”
Samsung launched Car Mode for Galaxy – a special car-friendly mode of operation for its smartphones – in September 2015, and it will hope that the acquisition of Harman will give it steadier footing in this space to better compete with Android Auto and Apple’s CarPlay.
Dinesh Paliwal, Harman chairman, president and CEO, stated: ”This compelling all-cash 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.
“Today’s announcement is a testament to what we have achieved and the value that we have created for shareholders. Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world.
"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. Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace. This transaction will bring Harman and Samsung’s complementary strengths together to accelerate innovation in this space.”
