Samsung is buying US car tech firm Harman for $8 billion

South Korean tech giant Samsung has announced that it is acquiring U.S car and audio systems supplier Harman International, with an aim to accelerate growth in automotive and connected technologies.

The all-cash deal will see Samsung buy Harman for $112 per share or total equity value of approximately $8 billion. According to Wall Street Journal this is the biggest acquisition in Samsung's history.

Harman  provides connected cars and audio systems with safety, security and entertainment features. More than 30 million cars are equipped with its auto systems.

The acquisition will bolster both company’s portfolios in consumer and professional products and systems, including the automotive platform. Samsung says that automotive electronics is expected to grow to more than $100 billion 2025 and has been a strategic priority for the firm.

The deal is expected to be completed in mid-2017, after getting approval by Harman shareholders and other regulatory approval, after which Harman will be a standalone Samsung subsidiary.

“We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow. Working together, we are confident that HARMAN can become a new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.” said Young Sohn, President and Chief Strategy Officer of Samsung Electronics. 

“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.” said Dinesh Paliwal, Harman Chairman, President and CEO.

Samsung has been going through rough times in second half of 2016. The company recalled and discontinued Galaxy Note7 following reports of phone catching fire due to faulty battery. The company also announced a voluntary recall of 2.8 million top-loading washing machines as well due to safety issues.

However, Samsung also had a few acquisitions as well. Back in October, it acquired artificial intelligence firm Viv Labs, founder by creator's of Apple Siri, followed by a cloud service company, mobile payment firm and connected home startup.

All eyes are now on Samsung's upcoming flagship, the Galaxy S8, which will be announced in Q1 2017. 

Source | Via