Samsung Electronics is acquiring Stamford-based car and audio systems supplier Harman International Industries for $112 per share in cash, or total equity value of about $8 billion ”“ reportedly the largest acquisition in Samsung”™s history.
The South Korean company said it expects the automotive electronics sector to grow to more than $100 billion by 2025, noting that approximately 65 percent of Harman”™s $7 billion of reported sales during the 12 months ended Sept. 30 were automotive-related, and that its order backlog for the market was approximately $24 billion as of June 30.
“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,” said Dinesh Paliwal, Harman chairman, president and CEO. “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.”
According to a press release, Samsung is seeking a “long-term growth strategy in automotive electronics, and plans to retain Harman”™s workforce, headquarters and facilities, as well as all of its consumer and professional audio brands.”
The deal, which is subject to approval by Harman shareholders and regulators, is expected to be completed in mid-2017, after which Harman will be a standalone Samsung subsidiary. It is expected to remain in Stamford.
Harman’s brands include AKG, Harman Kardon, Infinity, JBL, Bang & Olufsen, Bowers & Wilkins, Lexicon, Mark Levinson and Revel. More than 30 million automobiles on the road today are equipped with Harman audio and connected car systems.
