Samsung to buy car technology firm

Business

SEOUL: Samsung Electronics has agreed to buy Harman International Industries in an US$8 billion (K25bn) deal, marking a major push into the auto electronics market and the biggest overseas acquisition ever by a South Korean company.
The transaction highlights Samsung’s efforts to break into the high-barrier automotive industry where it has little track record and also marks a strategic shift for the electronics company, which has previously shunned big acquisitions.
“An M&A deal this big is a first for us. But it shows that under Jay Y. Lee, the company is changing and open to new ways to grow,” a source familiar with the deal told Reuters, referring to Samsung Electronics’ vice chairman.
Harman International Industries, Incorporated is an American company that designs and engineers connected products for automakers, consumers and enterprises worldwide, including connected car systems; audio and visual products, enterprise automation; and connected services of cars to connect to smartphones and other devices, is offering technology companies with new business opportunities.
“We have been studying the automotive market for some time.
“We conclude that organic growth will not get us where we want to go fast enough,” Young Sohn, President and Chief Strategy Officer of Samsung Electronics, said on a conference call.
Samsung, a maker of chips, displays, smartphones and TVs, agreed to acquire Harman for $112.00 per share in cash, a 28 percent premium to the United States company’s closing price on Friday.
Harman shares rose 25.6 per cent to their highest level in more than one year. “Harman was missing, in our opinion, a meaningful presence in displays and cockpit electronics; Samsung has these,” Baird Equity Research said in a report. – Reuters

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