Samsung acquires Harman for $8B to extend its automotive strategy

Samsung acquires Harman for $8B to extend its automotive strategy

Samsung has announced its plans to acquire Harman International Industries for $8 billion. The new deal will empower the South Korean company to grow its automotive platform that would take on Android Auto and Apple CarPlay.

Stanford, Connecticut-headquartered Harman is already the leader in the world of in-car audio systems — with an estimate presence across over 30 million vehicles worldwide. The company owns several popular brands such as Harman Kardon, AKG and JBL that all will now join Samsung to extend its existing automotive strategy.

“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 officer, Samsung Electronics, in a statement.

Although Samsung isn’t a master in the world of audio, it plans to rival Google and Apple with the latest deal. It would help the company enable the real concept of autonomous driving solutions, days ahead of much-rumoured Apple Car. Harman, on the other hand, will get a chance to work on even new opportunities.

“This compelling all-cash transaction will deliver significant and immediate value to our shareholders and provide new opportunities for our employees as a part of larger, more diversified company,” stated Dinesh Paliwal, chairman and CEO, Harman.

New audio developments

Apart from the automotive strategy, the Samsung-Harman duo would bring an all-new business-to-business platform for third parties to integrate audio and visual professional solutions for masses. The acquisition will also enable the Korean giant to access Harman’s 8,000 software designers and engineers who are working on some advanced IoT developments.

Samsung won’t put much pressure on Harman upon closing of the deal. Thus, the latter will operate as a standalone Samsung subsidiary. It will be led by Paliwal and the current management team. But going forward, Samsung would start utilising its monetary efforts and build a strong presence and Apple and Google.

Footsteps of Apple

Interestingly, Samsung is moving on the footsteps of Apple by foraying into the audio systems market through the latest deal.

The Cupertino company bought Beats Electronics for $3 billion in August 2014. That was the biggest acquisition by the iPhone maker but is yet to be leveraged on a mass level, instead of just being an online radio service.

The Apple Car might come with the real essence of the Beats deal. Meanwhile, Samsung is also apparently developing its self-driving vehicle model to compete against the Apple Car.

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