Samsung to Buy Car Tech Firm Harman for $8 Billion in South Korea’s Biggest Overseas Deal

Samsung Electronics announced an $8 billion deal on Monday to buy Harman International Industries, marking a major push into the auto electronics market and the biggest overseas acquisition ever by a South Korean firm.
The electronics giant previously shunned big acquisitions, and the latest deal underscores a strategic shift as the company tries to break into the high-barrier automotive industry where it has little track record.
“An M&A deal this big is a first for us. But it shows that under Jay Y. Lee, the company is changing and open to new ways to grow,” a source familiar with the deal told Reuters, referring to Samsung Electronics’ vice chairman.

The purchase of the Stamford, Connecticut-based maker of connected car and audio systems is part of Samsung’s efforts to find new areas of growth as its mainstay smartphone business — scarred by the disastrous withdrawal of the fire-prone Galaxy Note 7 — slows.
Automakers already include or are developing technologies to enhance safety and provide better smartphone connectivity and entertainment systems, creating an opening for tech companies to break into a market for software, services and components.
Samsung agreed to acquire Harman for $112.00 per share in cash, a 28 percent premium to the U.S. firm’s closing price on Friday.
“Samsung is using its huge cash pile to pull ahead of rivals in the auto technology market. But it remains to be seen whether Harman will be able to grow into a company that will be able to compete with the likes of Bosch and Continental,” said HDC Asset Management fund manager Park Jung-hoon.
Harman’s products, which provide infotainment, telematics, connected safety and security services, are used in more than 30 million vehicles made by automakers such as BMW, Toyota Motor Corp. and Volkswagen, according to its website.
Harman, the maker of JBL audio system, earns around two thirds of its revenue from the automotive-related segment, and its automotive order backlog as of end-June stood at $24 billion, more than three times annual sales of $6.9 billion in fiscal year 2016.
Samsung created an automotive electronics business team a year ago to identify growth opportunities in the sector. This year it invested $450 million in Chinese automaker and rechargeable batteries firm BYD Co. Ltd.
Separately, Samsung has held talks with Fiat Chrysler Automobiles (FCA) over a potential sale or partnership for the latter’s Magneti Marelli auto parts maker, sources have said. The current status of those talks is unclear.
The Harman acquisition is subject to regulatory approvals and is expected to close in mid-2017.
The deal was announced a day after media reports said Lee and several other heads of South Korea’s family-owned conglomerates were questioned by prosecutors investigating a political scandal engulfing South Korean President Park Geun-hye.
(Reporting by Hyunjoo Jin and Miyoung Kim; Editing by Edwina Gibbs and Jacqueline Wong)

Order your essay today and save 20% with the discount code: ESSAYHELP

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more