DHAKA: Samsung is increasing its focus on the connected car after the Korean firm announced plans to buy auto and audio product maker Harman in an all cash deal worth $8 billion.

You may best associate the name with audio equipment, but Harman is big on cars, too. The acquisition is Samsung’s largest to date and a big deal for its automotive ambitions.

Around 65 percent of Harman’s sales — which totaled $7 billion over the last year — were for car-related products. Samsung added that Harman products, which included connected car devices and audio systems, are installed in an estimated 30 million vehicles worldwide.

Samsung lags Google and Apple on in-car entertainment and software systems (Android Auto and Apple CarPlay, respectively) so this deal will give it the kind of reach that could allow it to compete more evenly with its rivals in the car.

“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,” Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics, said in a statement.

Terms of the deal will see Samsung pay $112.00 per share. That’s a healthy premium on Harman’s current share price of $87.65, and it gives the deal a total value of approximately $8 billion.

The transaction is expected to close by mid-2017, upon which Harman will become a standalone subsidiary of Samsung. Dinesh Paliwal will continue to lead the firm as its Chairman, President and CEO, both Harman and Samsung said.

“Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world,” Paliwal added via canned comment.

With Google rapidly advancing its automotive technology and Apple reportedly developing an electric vehicle (or not), it is perhaps not surprising that Samsung has made ground on automotive itself in 2016, reports techcrunch.com.

BDST: 1534 HRS, NOV 14, 2016
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