Samsung Electronics is placing its bet on automotive and connected technologies as it announced their intent to acquire Harman International Industries Inc. for $8 billion. This move will accelerate the Korean tech giant's position in the automotive electronics business which is expected to grow to $100 billion by 2025.
“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.
With more than 30 million units equipped with Harman’s connected car and audio systems, there is approximately 65-percent of the company’s recorded sales that are automotive-related during the 12 months ended September 30, 2016.
“The vehicle of tomorrow will be transformed by smart technology and connectivity,” said Young Sohn, President and Chief Strategy Officer of Samsung Electronics.
Samsung's connected technologies will integrate Harman's automotive and connected services businesses to drive greater sales, which will provide significant benefits as automakers speed the adoption of next-generation connected cars.
The Korean tech giant will also gain access to Harman’s 8,000 software designers and engineers, unlocking the IoT market potential, which will deliver the next generation of cloud-based consumer and enterprise experiences, including end-to-end services for the automotive market.
Meanwhile, Harman’s leading brands and cutting-edge audio systems such as JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel will bring significant improvement in Samsung’s products. The company also licenses Bowers & Wilkins and Bang & Olufsen brands for the automotive sector.
The combination will also expand the combined company’s business-to-business platform through its ability to deliver integrated, large-scale audio and visual professional solutions at stadiums, concert facilities and other performance centers.
Upon closing the agreement, Samsung will immediately be given a significant presence in the automotive electronics of Harman, which has been a strategic priority for Samsung. Harman, on the other hand, will continue to run as a standalone Samsung subsidiary. Dinesh Paliwal and Harman's current management team will also continue to lead the company.
Samsung said that they are expecting substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow.