| Message Text: |
Samsung Electronics on Monday announced that it will buy U.S.-based automotive electronics company Harman International Industries Inc., an $8 billion acquisition deal that will help the electronics giant to set in the field of connected car and automotive electronics.
Upon closing, the transaction will immediately give Samsung a significant presence in the rapidly growing market for connected technologies, particularly automotive electronics, which has been a strategic priority for Samsung, and is expected to grow to more than $100 billion by 20251. HARMAN develops connected car solutions, with more than 30 million vehicles currently equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security.
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. In addition, the combination of HARMAN’s brands and audio capabilities and Samsung’s expertise in consumer electronics will deliver customer benefits across Samsung’s portfolio of consumer and professional products and systems.
"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. "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. Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed deep respect for him, his strong senior leadership team and HARMAN’s talented employees. HARMAN’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers."
Besides its expertise in new connected car technologies including infotainment, cyber security, over-the-air updates and telematics, HARMAN's leading brands and audio systems include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel. The company also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive.
If this deal goes through it will be the biggest acquisition Samsung’s made. The investment means Samsung has bought itself the chance to become a big cheese in future automotive systems, a direct challenge to Apple’s CarPlay and to Google Auto.
CarPlay is already in use by over 40 automakers with numerous vehicles now being made available with it built-in. Apple’s worked to achieve such scale, but now it looks like Samsung has bought it in one -- Harman reached major deals with Fiat Chrysler and General Motors, has $24 billion of orders booked and its equipment is already in use in 30 million cars.
Upon closing, HARMAN will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and HARMAN’s current management team.
Samsung’s Automotive Electronics Business Team, which was established in December of 2015 to identify opportunities for Samsung in the automotive sector, will work with the HARMAN management team to realize the full growth potential of the combination.
The transaction, which is subject to approval by HARMAN shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017. |