Samsung to buy car tech firm Harman for $8 bn

Electronics giant Samsung will buy Harman International Industries for USD 8 billion as the Korean company attempts to aggressively tap into the auto electronics market.
Leading brands under Harman include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel. It also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive.
The deal, which is being pegged as the largest overseas acquisition ever by a South Korean firm, will see Samsung pay USD 112 per share in cash (total equity value of about USD 8 billion).
Upon closing of the deal (expected in mid-2017), Harman will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and Harman's current management team, Samsung said in a statement.

The transaction will give Samsung a significant presence in the large and rapidly growing market for connected technologies, particularly automotive electronics, which has been a strategic priority for Samsung.
Samsung expects this segment to grow to more than USD 100 billion by 2025.

Harman is a market leader in connected car solutions with over 30 million vehicles currently equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security.
About 65 per cent of Harman's USD 7 billion reported sales during the 12 months ended September 30, 2016 was automotive-related.
"We see substantial long-term growth opportunities in the auto technology market as demand for Samsung's specialised electronic components and solutions continues to grow.

"Working together, we are confident that Harman can become a new kind of tier I provider to the OEMs by delivering end-to-end solutions across the connected ecosystem," Samsung President and Chief Strategy Officer Young Sohn said.
Car makers are working on developing technologies to enhance safety of passengers and providing better connectivity and entertainment systems.
This opens a plethora of opportunities for tech companies to develop products/software as well as collaborate with automakers.