Samsung Electronics has agreed to acquire US auto parts manufacturer Harman International Industries for about $8bn, in a bid to accelerate growth in automotive and connected technologies.
The deal will give Samsung a significant presence in the large and rapidly growing market for connected technologies, especially automotive electronics, which is estimated to increase to over $100bn by 2025.
At present, as many 30 million vehicles around the world are equipped with Harman’s telematics, connected safety and security solutions.
About 65% of the company's $7bn in sales, ending in September this year were associated to automotive.
The transaction enables Harman to use Samsung’s expertise in connected mobility, semiconductors, user experience, displays and its worldwide distribution channels.
It integrates Harman's know-how in new connected car technologies, including its top positions in infotainment, cyber security, over-the-air updates and telematics, with Samsung’s experience in connectivity technologies, including 5G, UX/UI, display technology and security solutions.
Samsung will gain access to Harman's 8,000 software designers and engineers who are unlocking the potential of the Internet of things market.
The collaboration will provide the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market via the convergence of design, data and devices.
Samsung Electronics vice chairman and CEO Oh-Hyun Kwon said: “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."
After the deal’s closure, Harman will continue to operate as standalone subsidiary of Samsung and will be continued to be headed by Dinesh Paliwal as the CEO and its present team.
Harman chairman, president and CEO Dinesh Paliwal said: “Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world.
“Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman's technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers.“
