Samsung has declared that it had bought Harman, an automotive and audio product market. The entire deal will cost Samsung 8 billion dollars.
Probably, customers know Harman best for its audio equipment, but we must also add that this company is big on cars, as well.
Moreover, this acquisition is considered to be Samsung’s larger to date and a huge step forward to automotive ambitions. Approximately 60 percent of Harman’s sales were for-car related products. This means a total of 7 billion dollars over the last years.
This also means that Harman is a huge player on the automotive market and Samsung hit the jackpot with this deal.
Samsung also declared that Harman products, including audio systems and connected car devices, are installed into more than 30 million vehicles worldwide. So, with this acquisition, Samsung joins the battle with Apple and Google on the in-car entertainment and software systems market.
As we know, Google and Apple have their own software systems, Android Auto, respectively Apple CarPlay. This deal will allow Samsung to compete more evenly with its rivals on the car market.
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,” has declared in a statement Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics.
As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology, and a recognized portfolio of best-in-class products, Harman immediately establishes a strong foundation for Samsung to grow our automotive platform,” he continued.
Harman has been on the market starting with 1986. Since then, its stock soared to an all-time high of 145 dollars per share in April 2015.
Unfortunately, the company’s shares have been in decline over the past year, falling to 70 dollars in February. Samsung is offering a deal of 112 dollars per share in cash. With this amount of money, Samsung hopes that it will convince shareholders to approve the deal. If this deal will be approved, Harman will start operating as a Samsung subsidiary.
“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,” has declared Young Sohn, president and chief strategy office at Samsung.
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,” he added.
This transaction is expected to close by mid-2017. Moreover, after the deal is done, Dinesh Paliwal will continue to lead as Chairman, President and CEO.
Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world,” Paliwal has declared.
Another important acquisition that Samsung has made this year is Viv. This is a highly-regarded virtual assistant from the creators of Apple’s Siri service. It seems that Samsung has started to catch up with its competitors on different market areas.
