Samsung announces plans to buy Harman for $8 billion to boost in-car tech

Samsung has announced that it will be buying US audio company Harman for $8 billion. It will be an all cash transaction making it one of the biggest acquisitions for Samsung. Interestingly the Korean giant wants to make use of this takeover to accelerate the growth in automotive and connected car technologies. Harman owns a bunch of audio based brands including Harman Kardon, AKG, and JBL. WIth this acquisition, the company is expected to double its revenue in the coming five years. It already has ties with big brands like Fiat Chrysler and General Motors with backlog orders worth approximately $24 billion dated 30 June 2016. Samsung believes that its expertise in connected mobility, semiconductors, user experience and displays will leverage Harman’s in-vehicle technologies department. It also added that the partnership will be utilised to elevate user experiences across Samsung’s complete portfolio of consumer and professional products and systems. Dinesh Paliwal, Harman Chairman, President and CEO, stated, “This compelling all-cash transaction will deliver significant and immediate value to our shareholders and provide new opportunities for our employees as part of a larger, more diversified company. Today’s announcement is a testament to what we have achieved and the value that we have created for shareholders. Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world. Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman’s technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers. Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace. This transaction will bring Harman and Samsung’s complementary strengths together to accelerate innovation in this space. More broadly, this investment underscores the strength of Harman’s employees, as well as our success and leadership across our markets. We look forward to working together with Samsung to elevate experiences for consumers worldwide.” This is an interesting move by the Korean giant following one of the biggest recalls in smartphone history. Clearly the company is not shaken by the incident. The connected automotive industry has seen a jump in the recent past as carmakers have focused on embedding high-end infotainment systems for an enhanced user experience. The partnership could actually be a win-win for both the companies.