Samsung Electronics has agreed to buy US automotive technology firm Harman International Industries for US$8 billion, marking the biggest deal ever for the South Korean firm.
The company will pay US$112.00 per share in cash for Harman, representing a 28 percent premium to the US firm’s Nov. 11 closing share price, Reuters reports.
The deal will help Samsung make a major push into the auto electronics market.
Harman, which is based in Stamford, Connecticut, is an audio pioneer that has made significant strides in the automotive world.
Its products, which provide infotainment, telematics, connected safety and security services, are used in more than 30 million vehicles made by firms such as BMW, Toyota Motor and Volkswagen.
“We have been studying the automotive market for some time. We conclude that organic growth will not get us where we want to go fast enough,” Young Sohn, President and Chief Strategy Officer of Samsung Electronics, was quoted as saying on a conference call.
“Samsung will not get into the business of manufacturing cars,” the executive said.
The Harman purchase is part of Samsung’s search for new growth areas as its smartphone business slows, Reuters noted.
Harman earns around two-thirds of its revenue from its automotive-related business. Its automotive order backlog as of end-June stood at US$24 billion, according to the report
Samsung created an automotive electronics business team a year ago to look for opportunities in this area.
Earlier this year, it invested US$450 million in Chinese automaker and rechargeable batteries firm BYD Co.
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