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Samsung to buy car parts and audio system maker Harman for $8 billion

Samsung Electronics is all set to acquire Harman International Industries. The latter is a reputed audio equipment and connected automobile parts manufacturer based in the USA. With this deal, the Korean technology giant aims to foray into the car industry. The entire equity value of the acquisition is $8 billion US Dollars. This makes it Samsung’s most expensive purchase ever.

The deal will give the Korean company access to Harman’s eminent sub-brands like Harman Kardon, AKG, Mark Levinson, JBL, Lexicon, Infinity, and Revel. This will automatically result in Samsung’s significant presence in the massive and highly potential market for connected technologies especially in the automobile sector. Combined, both the companies target to cross the 100 billion mark by 2025.

The main motto of this acquisition is to mate Harman’s expertise in advanced connected car and audio equipment with Samsung’s specialty of sophisticated mobile processors, storage chips, display panels, 5G network, user interface and widespread distribution channel. This will lead to the development of all-around solutions to smart connected car technologies using Harman’s infotainment systems and Samsung’s proprietary electronic components.

With it’s latest acquisition, the Korean technology giant aims to leverage the vast potential of the future smart car technology. Commenting on this, Samsung Electronics’ President and Chief Strategy Officer Young Sohn said, “The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade.” He also mentioned the company’s notion of becoming a one of a kind Tier 1 brand to provide end-to-end solutions to the automobile OEMs.

The merger will not only lead to growth in the car sector but also benefit the Korean company’s consumer electronics department. We may soon see Samsung devices powered by Harman’s high-end audio systems like Harman Kardon, JBL, Bang and Olufsen, etc. The acquisition will also lead to the development of all in one large-scale audio and visual solutions to be used by various auditoriums or other cultural performance centers.

As per the agreement, Harman will operate as an independent subsidiary of Samsung and shall be run by the same management team. The acquisition will also retain all of the workforce, facilities, and headquarters of Harman. This will give Samsung access to 8000 odd professional software designers and engineers with which the company wishes to develop its next generation product portfolios.

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