Korean electronics giant Samsung has announced the acquisition of US hi-fi and connected in-car audio maker Harman International for $8 billion (£6.4bn).
Harman’s brands include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity and Revel. It recently purchased the in-car division of Bang & Olufsen, and it also licenses the in-car division of Bowers & Wilkins.
Around 65 per cent of Harman’s $7bn reported sales in the 12 months ended September 30 were automotive-related. Harman is said to be a market leader in connected car solutions with more than 30 million vehicles equipped with its systems.
In a statement on its website, Samsung said that this agreement would give it 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 said it expects the connected technologies market to grow to more than $100bn by 2025.
“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,” said Oh-Hyun Kwon, vice-chairman and chief executive of Samsung Electronics.
“As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognised portfolio of best-in-class products, Harman immediately establishes a strong foundation for Samsung to grow our automotive platform. [Harman CEO] Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed deep respect for him, his strong senior leadership team and Harman’s talented employees. ”
Added Young Sohn, president and chief strategy officer of Samsung Electronics: “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 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.”
Harman will operate as a standalone Samsung subsidiary and will continue to be led by Harman president, chairman and chief executive Dinesh Paliwal and its current management team.
Harman’s Mr Paliwal commented: “Today’s announcement is a testament to what we have achieved. 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.”