Electronics company, Samsung, known most recently for their exploding cellphones and top-loading washers, plans to acquire HARMAN in an $8 billion deal.
Samsung Acquires HARMAN for $8 Billion
Samsung will acquire HARMAN at $112 per share totaling $8 billion. As Samsung announced, this deal will immediately give them a significant presence in the large and rapidly growing market for connected technologies, particularly automotive electronics, which has been a strategic priority for Samsung. This market is expected to grow by more than $100 billion by 2025.
HARMAN is actually a leader in automotive audio solutions. In fact, approximately 65% of their $7 billion of reported sales during the past 12 months ending September 30, 2016 are automotive-related. They also have an order backlog for this market at June 30, 2016 was approximately $24 billion.
“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.”
HARMAN’s other brands include JBL, Harman Kardon, and AKG to name a few. HARMAN also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive. All of the aforementioned brands will greatly enhance the competitiveness of Samsung’s mobile, display, virtual reality and wearable products to deliver a fully differentiated audio and visual experience for customers.
The Samsung acquisition, which is subject to approval by HARMAN shareholders, is expected to close in mid-2017.
