Samsung buys car tech company Harman for $8 billion
Samsung Electronics said it had agreed to buy Harman International Industries in an $8 billion deal, marking a major push into the auto electronics market and the biggest overseas acquisition ever by a South Korean company.
The transaction highlights Samsung’s efforts to break into the high-barrier automotive industry where it has little track record and also marks a strategic shift for the electronics company, which has previously shunned big acquisitions.
“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 search for new growth areas as its smartphone business – scarred by the withdrawal of the fire-prone Galaxy Note 7 – slows.
The greater use of electronics and software in vehicles, and the ability of cars to connect to smartphones and other devices, is offering technology companies with new business opportunities.
“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, said on a conference call.