Samsung Set to Acquire Harman in a Landmark $8 Billion Deal
Samsung Electronics is set to buy Harman for $8 billion, speeding up its expansion in the automotive and connected tech sectors. This acquisition will establish Samsung as a major player in the connected car market, which is predicted to surpass $100 billion by 2025.
By merging Harman’s expertise in infotainment, telematics, and sound management with Samsung’s connected mobility products, semiconductors, user experience, and displays, the aim is to create a stronger presence in the market.
“Harman complements Samsung perfectly in terms of technology, products, and solutions. Joining forces is a natural step in the automotive strategy we’ve been pursuing,” said Oh-Hyun Kwon, CEO of Samsung Electronics. “As a top-tier automotive supplier with strong customer relationships and a renowned portfolio of top-notch products, Harman provides a solid foundation for expanding our automotive platform.”
Kwon also praised Harman’s chairman Dinesh Paliwal as a proven global leader. “We have developed great respect for him, his senior leadership team, and Harman’s talented employees through our discussions,” said Kwon. “Harman’s rapid growth and strong automotive order pipeline highlight its commitment to innovation and customer satisfaction.”
Paliwal expressed his enthusiasm for the partnership. “Samsung is an ideal partner for Harman, and this deal will greatly benefit our automotive customers and consumers worldwide. Combining Samsung’s cutting-edge displays, connectivity, and processing with Harman’s tech leadership and strong customer relationships will offer new solutions for OEMs and their customers,” he said.
Samsung will purchase Harman for $112 per share in cash, equating to a total equity value of approximately $8 billion. Once completed, the transaction will immediately boost Samsung’s presence in the burgeoning market for connected technologies, especially in automotive electronics, a strategic focus for the company expected to grow beyond $100 billion by 2025.
“This all-cash transaction will provide significant value to our shareholders and open new opportunities for our employees within a larger, more diversified company,” Paliwal added. “This deal signifies what we have achieved and the value created for our shareholders. In the automotive industry, partnerships and scale are key to meeting the growing demand for robust connected car and autonomous driving solutions. This acquisition will merge Harman’s and Samsung’s strengths, accelerating innovation in this field. Overall, this investment emphasizes the strong performance and leadership of Harman’s employees. We are excited to collaborate with Samsung to enhance consumer experiences globally.”
Currently, over 30 million vehicles feature Harman’s connected car and audio systems, including embedded infotainment, telematics, and connected safety and security systems. Nearly two-thirds of Harman’s $7 billion sales for the year ending September 2016 were automotive-related, and its order backlog in June 2016 was approximately $24 billion.
Harman’s experience in designing and integrating in-vehicle technologies, along with its established relationships with leading car manufacturers, will open new growth opportunities for the combined business. This synergy allows leveraging Samsung’s expertise in connected mobility, semiconductors, user experience, displays, and global distribution. Additionally, combining Harman’s brand and audio capabilities with Samsung’s consumer electronics proficiency could provide enhanced customer benefits and elevate user experiences across Samsung’s complete product portfolio.
