And the M&A period continues. Verizon, IBM, SAP and Qualcomm have dropped multiple billions on development, acquisitions and new IoT technology and expansion this year. Samsung joined the Billion Club earlier this year, and in a new release this morning has said it’ll more than quadruple its earlier play with a planned purchase of Harman, giving the electronics giant a huge play in the Connected Transportation space.
Here are the details: Samsung Electronics and Harman International Industries have announced that they have entered into a definitive agreement under which Samsung will acquire Harman for $112.00 per share in cash, or total equity value of about $8 billion. When the deal closes, it will make Samsung a serious IoT player in the Connected Transportation space and the IIoT.
“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 CEO, Samsung Electronics. “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. 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. HARMAN’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”
More than 30 million vehicles are currently equipped with Harman’s connected car and audio systems, including embedded infotainment, telematics, connected safety and security. About 65 percent of the company’s $7 billion in reported sales since September 2015 are automotive-related, and it has reported about $24 billion in backlogged orders.
“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,” added Young Sohn, President and CSO, Samsung Electronics. “We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized 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.”
Samsung said it expects the deal to be a major win, not just for the company and its bottom line, but also for customers by leveraging Samsung’s and HARMAN’s complementary technologies.
In automotive is where the major and most visible changes will take place. Harman’s infotainment, cyber security, over-the-air updates and telematics capabilities will be tied into Samsung’s 5G, UX/UI, display technology and security solutions to create the next generation of connected cars.
Samsung also will gain access to Harman’s 8,000 software designers and engineers who are working on IoT market solutions, with the goal of building new cloud-based consumer and enterprise experiences, and end-to-end services for the automotive market through the convergence of design, data and devices.
Upon closing, Harman will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and the current management team, workforce, headquarters and facilities, as well as all of its consumer and professional audio brands.
The transaction, which is subject to approval by shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017.
Edited by
Alicia Young
