Samsung Has Confirmed Acquisition of HARMAN to Drive Growth in Automotive Technology
Samsung and HARMAN have confirmed to have entered into a definitive agreement that will allow the latter to be acquired for $8 billion USD. With Samsung’s grip already tightened around a string of industries, the acquisition of HARMAN will allow it to tap into the automotive and connected technologies sector, so let us dig right in and talk about how the tech giant could become a major player in this growing industry.
HARMAN Being a Market Leader in Connected Car Solutions Definitely Caught the Eye of Samsung – Korean Giant Expected to Grow Significantly by 2025
Samsung will acquire HARMAN for $112.00 per share in cash, or total equity value of approximately $8.0 billion. After the transaction has been successfully completed, the Korean firm would have gained a monumental presence in the ever-growing market of connected technologies. Automotive and connected technologies have been a strategic interest to Samsung, and the company is expected to grow more than $100 billion in this sector by the year 2025. Now why did HARMAN come into the company’s crosshairs?
The answer is rather simple; HARMAN is currently the market leader in connected car solutions, with more than 30 million vehicles currently equipped with its connected car and audio systems, which also includes the following:
- Embedded infotainment
- Connected safety and security
To put things in perspective of how HARMAN is actually influencing the market of connected technologies, 65 percent of HARMAN’s $7.0 billion reported sales during the 12 months ended September 30, 2016, are automotive-related, and its order backlog for this market at June 30, 2016 was approximately $24 billion.
Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics has stated that HARMAN is similar to Samsung when it comes to influencing markets and both companies joining forces will bring together a revolutionary change:
“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. 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.”
The transaction is going to be subject to approval by HARMAN shareholders, regulatory approvals, and other customary closing conditions, and will be expected to close in mid-2017. What are your thoughts on Samsung’s latest acquisition to tap into the automotive and connected technologies category? Tell us your thoughts right away.