Seoul, Korea (November 14, 2016)—Consumer electronics giant Samsung has agreed to acquire Harman in an $8 Billion deal. The focal point of the acquisition is Harman’s presence in car audio and the emerging “connected car” technology sector, but the deal includes its considerable footprint in pro audio as well. Harman owns the brands AKG, Lexicon, JBL Professional, Studer and Crown.
Samsung plans to retain Harman’s work force, headquarters and facilities, as well as all of its consumer and professional audio brands. Likewise, the various entities will continue to operate under existing Harman chairman, president and CEO, Dinesh Paliwal, and the current management team.
The acquisition, expected to close in mid-2017, is intended to accelerate Samsung’s move into the connected car marketplace, which it categorizes as a “strategic priority” in the wake of establishing an Automotive Electronics Business Team in December, 2015.
Currently, Harman’s technologies are present in more than 30 million vehicles equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security. Roughly 65 percent of Harman’s $7.0 billion of reported sales during the 12 months ended September 30, 2016 are automotive-related; comparatively, the whole of its professional solutions division, which includes the pro audio brands as well as others like video switching/control device manufacturer AMX and lighting company Martin, contributed 14 percent of Harman’s revenues over the last year.
Samsung’s offer of $112 a share marks the end of a rollercoaster ride for Harman stock over the last few years. After riding out the recession, which saw it dip under $40 at points in 2011, the stock took off in early 2013, eventually hitting $145 in early 2015 before dropping amidst slow earnings. As a result, Samsung’s offer pays a notable premium on the $88 price shares were trading at on Friday. Harman stock quickly jumped to $110 on the NYSE in early trading.