It's Samsung's biggest overseas acquisition ever.

Samsung Electronics has agreed to pay $112 per share for Harman International Industries to acquire the tech giant in an $8-billion bid to fight Apple and Google in the automotive technology business. The purchase price per share is 28 percent more than Harman’s closing stock price of $87.65 on November 11.

Samsung wants to couple its microprocessors and software with Harman’s infotainment and other in-car systems to bolster connectivity. The move comes days after Samsung Group heir-apparent 48-year-old Jay Y. Lee, which has been taking a more active role since his father’s heart attack in 2014, ascended to the board.

Speaking about the transaction, Dinesh Paliwal, Harman Chairman, President and CEO, 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.”

His sentiments were echoed by Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics:

“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.”

To get a better understanding of why this is a huge deal for the car industry altogether, Harman owns a multitude of brands, such as JBL, Revel, Lexicon, AKG, Mark Levinson, and obviously, Harman Kardon. In addition, it also licenses Bang & Olufsen and Bowers & Wilkins brands for automotive. Samsung mentions all of them will benefit from the company’s knowhow regarding mobile, display, virtual reality, and wearable products.

Through this major acquisition, Samsung will gain access to Harman’s 8,000 designers and engineers once the deal will be finalized by mid-2017. Harman will operate as a standalone Samsung subsidiary and will continue to be led by the existing management team.

Source: Samsung

 

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