Samsung has announced it has entered into a definitive agreement to acquire Harman, the designer and maker of connection products for automakers, in a bid to expand and accelerate its growth in connected technologies.
On Monday, Nov. 14 the Korean company confirmed that it will buy Harman for $112 per share, which brings the cost of acquisition to about $8 billion. Harman has a strong presence in the auto market as more than 30 million cars are equipped with the company’s connected car equipment.
Harman has struck big deals with vehicle makers such as Fiat Chrysler and General Motors and the company is expected to double its revenue in the next five years.
About 65 percent of Harman’s total sales of $7.0 billion in the last 12 months that ended Sept. 30 were related to automotive. Harman’s long-term relations with some of the leading automakers will bring a significant growth prospect for Samsung in the near term.
“As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognized portfolio of best-in-class products, Harman immediately establishes a strong foundation for Samsung to grow our automotive platform,” says Oh-Hyun Kwon, the vice chairman and CEO of Samsung Electronics.
Connected Car And Tech Companies
Simple mobile phones have transformed to sophisticated smartphones. Future cars will also be converted with the help of connectivity and smart technology.
Cars are becoming more connected and this has resulted in many tech companies to show their interest in the industry. Companies like Apple and Google already have some presence in the connected car world.
Google has been testing self-driving cars for a few years now and Apple is also said to be working on an electric car, with reports noting how the company poached Tesla engineers to accelerate its ambitious plans in the electric car industry.
However, a recent Tech Times report highlighted that Apple has drastically scaled down its automotive ambitions, dropping plans to build its own electric vehicle in favor of developing software for existing automakers.
Samsung’s acquisition of Harman will undoubtedly make the Korean company’s presence felt in the car industry.
Although the current focus in the auto industry is on autonomous vehicles, fitting the cars with connected technology is also very lucrative.
Samsung’s name in the smartphone and tablet industry is extremely popular and it could be that the Korean company is looking to integrate connected car solutions in its mobile devices as well. However, Samsung did not reveal what products it plans to develop after the Harman acquisition is completed.
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