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Products made by U.S.-based Harman currently found in more than 30 million vehicles.
Samsung on Monday significantly ramped up its connected car strategy with the US$8 billion (€7.46 billion) acquisition of Harman International.
U.S.-based Harman makes a range of products, including audiovisual and big data analytics solutions, but its connected car division is by far its revenue driver, accounting for 65% of the company’s $7 billion of sales in the 12 months to 30 September.
More than 30 million vehicles are currently equipped with Harman’s infotainment, telematics, and connected safety and security products.
Samsung said automotive electronics is a strategic priority for the company, and it expects the market to be worth $100 billion by 2025.
Harman’s experience with designing and integrating in-vehicle technologies, and its long-term relationships with some of the world’s biggest car makers, represents a significant growth opportunity for Samsung, which brings to the table its expertise in connected mobility, semiconductors, user experience, display technology, and its global distribution channels.
"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 CEO of Samsung, in a statement.
Samsung’s $112 per-share, all-cash offer represents a 28% premium on Harman’s closing share price on 11 November. Samsung will fund the transaction with cash on hand.
The deal is subject to customary closing conditions, including approval by regulators and Harman shareholders. It is expected to close in mid-2017.
Upon completion, Harman will operate as a standalone subsidiary of Samsung, and will continue to be led by Harman’s current CEO, Dinesh Paliwal, and his management team.
"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," Kwon said.
"Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world," Paliwal said, adding that the combination of the two companies will accelerate innovation in connected car and autonomous driving solutions.
"More broadly, this investment underscores the strength of Harman’s employees, as well as our success and leadership across our markets," he said.
