Samsung Electronics Acquires HARMAN
Samsung Electronics and Harman International Industries, Incorporated 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 approximately $8.0 billion.
The transaction will give Samsung a significant presence in the large and rapidly growing market
for connected technologies, particularly automotive electronics which has been a strategic priority
for Samsung; and is expected to grow to more than $100 billion by 2025. Harman is the market leader
in connected car solutions with more than 30 million vehicles currently equipped with its connected
car and audio systems including embedded infotainment, telematics, connected safety and security.
Approximately 65% of Harman’s $7.0 billion of reported sales during the 12 months ended
September 30, 2016 are automotive-related and its order backlog for this market at June 30,
2016 was approximately $24 billion.
Harman’s experience in designing and integrating sophisticated in-vehicle technologies as well
as its long-term relationships with most of the world’s largest automakers will create significant
growth opportunities for the combined business by enabling it to leverage Samsung’s expertise in
connected mobility, semiconductors, user experience, displays and its global distribution channels.
In addition, the combination of Harman’s brands and audio capabilities and Samsung’s expertise in
consumer electronics will deliver enhanced customer benefits and elevate user experiences across
Samsung’s complete portfolio of consumer and professional products and systems.
Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer, Samsung Electronics said, “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.”
“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. 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,” he added.
Young Sohn, President and Chief Strategy Officer, Samsung Electronics said, “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. 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.”
Dinesh Paliwal, Chairman, President and CEO, Harman stated, “This compelling all-cash transaction
will deliver significant and immediate value to our shareholders and provide new opportunities
for our employees as part of a larger, more diversified company. Today’s announcement is a
testament to what we have achieved and the value that we have created for shareholders. Samsung
is an ideal partner for Harman and this transaction will provide tremendous benefits to our
automotive customers and consumers around the world. Combining Samsung’s strengths in leading-edge
displays, connectivity and processing solutions with Harman’s technology leadership and
long-standing customer relationships will enable OEMs to provide new offerings for their
customers. Partnerships and scale are essential to winning over the long term in automotive as
demand for robust connected car and autonomous driving solutions increases at a rapid pace. This
transaction will bring Harman and Samsung’s complementary strengths together to accelerate
innovation in this space. More broadly, this investment underscores the strength of Harman’s
employees, as well as our success and leadership across our markets. We look forward to working
together with Samsung to elevate experiences for consumers worldwide.”