In Sectors

Samsung Electronics to buy Harman for US$8 billion

samsung-office-signage-retail-in-asia

Samsung Electronics has agreed to buy Harman International Industries in an $8 billion deal, making a major push into the auto electronics market and the biggest overseas acquisition ever by a South Korean company.

The transaction highlights Samsung’s effort 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.

The purchase of the Stamford, Connecticut-based maker of connected car and audio systems is part of Samsung’s search for new growth areas as its smartphone business — scared by the withdrawal of the fire-prone Galaxy Note 7 — slows.

SEE ALSO: Samsung and Hyundai troubles weigh on South Korea’s GDP 

The greater use of electronics and software in vehicles, and the ability of cars to connect to smartphones and other devices, is offering technology companies with new business opportunities.

Samsung, a maker of chips, displays, smartphones and TVs, agreed to acquire Harman for $112 per share in cash, a 28 percent premium to the U.S. company’s closing the day before.

“Harman was missing, in our opinion a meaningful presence in displays and cockpit electronics; Samsung has these,” Baird Equity Research said in a report.

Harman’s products, which provide infotainment , telematics, connected safety and security services, are used in more than 30 million vehicles made by automakers such as BMW, Toyota Motor Corp and Volkswagen, according to the website.

(Source: Reuters)

Follow Retail in Asia on Facebook, Twitter and LinkedIn.

Get our top stories delivered to your inbox:

 

Stay ahead
Subscribe for free!
Register now
Stay ahead