In Samsung’s efforts to expand their product line, the company is now planning to add wheels into their equation starting with a deal to acquire Harman International Industries, an American automotive technology company in pursuit of going beyond gadgets and appliances.
Harman International Industries is well known for making great audio and visual systems under the name of legendary audio tech giants such as AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon®, Mark Levinson®, and Revel®. From 30 million and more cars are powered by the innovative technology of Harman audio and infotainment. Other notable creations from the company are navigation services, onboard entertainment and the connectivity around the world.
Samsung closed the deal of acquiring Harman for $112.00 per share in cash or a total of $8.0 billion in equity value. Upon closing, Samsung already descended on the market for connected technologies for being one of the fastest in growth particularly in automotive electronics, which has been the main focus of the company recently and is expected to grow to a total of $100 billion by the year 2025.
Samsung Beyond Ambitious
The $8 billion acquisition has been the biggest overseas acquisition in the company’s history. The plummeting sales of the company led by their recently released and later recalled Note7 phones due to issues with the unit’s battery. In total, the company lost $2 billion off its profit and tarnished the company’s brand. But even after the recent mishaps, Samsung still sits atop the smartphone market. The company sold 71.7 million smartphones in their third quarter this year.
The partnership is looking to an optimistic future together; the market for more screens inside cars and computers could wake an industrial boom for the company.
Samsung’s first step inside the doors of automotive started a year ago with the establishment of a team to create opportunities in the automotive business. Entering the middle of 2016, the tech company also invested a 2% stake for $455 million in Chinese automaker and rechargeable industries firm BYD Co Ltd. China’s sales in regards to hybrid and electric cars quadrupled to 331,000 vehicles last year.
Samsung joins the global trend of diving into the automobile industry. Google has been notorious these past years in creating their own self-driving software, whilst Apple went on a massive hiring binge on employees in hopes of creating their own car. Uber Technologies Inc. which is well known for their driving services is also in the production of creating their own autonomous car technology.
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