Samsung to Buy Car Tech Firm Harman for $8 Billion in South Korea’s Biggest Overseas Deal
Samsung Electronics announced an $8 billion trade on Monday to buy Harman International Industries, marking a greater reduce into the auto electronics dispense and the biggest aggravateseas wages constantly by a South Korean sturdy.
The electronics monster previously shunned big wagess, and the remotest trade inferiorscores a strategic change as the association tries to smash into the high-barrier automotive perseverance where it has diminutive course annals.
"An M&A trade this big is a leading for us. But it shows that inferior Jay Y. Lee, the association is changing and notorious to new ways to enlarge," a spring accustomed delay the trade told Reuters, referring to Samsung Electronics' fault conductor.
The donation of the Stamford, Connecticut-based manufacturer of conjoined car and audio methods is part of Samsung's efforts to experience new areas of enlargeth as its mainstay smartphone interest -- scarred by the luckless delaydrawal of the fire-prone Galaxy Note 7 -- slows.
Automakers already involve or are developing technologies to improve protection and contribute meliorate smartphone connectivity and relief methods, creating an notoriousing for tech companies to smash into a dispense for software, services and components.
Samsung agreed to attain Harman for $112.00 per portion-out in currency, a 28 percent bribe to the U.S. sturdy's failure appraisement on Friday.
"Samsung is using its vast currency accumulate to draw onwards of rivals in the auto technology dispense. But it dregs to be seen whether Harman accomplish be effectual to enlarge into a association that accomplish be effectual to cope delay the likes of Bosch and Continental," said HDC Asset Management investment aggravateseer Park Jung-hoon.
Harman's products, which contribute infotainment, telematics, conjoined protection and safety services, are used in aggravate than 30 pet vehicles made by automakers such as BMW, Toyota Motor Corp. and Volkswagen, according to its website.
Harman, the manufacturer of JBL audio method, earns encircling two thirds of its produce from the automotive-related section, and its automotive manage backlog as of end-June bright at $24 billion, aggravate than three times annual sales of $6.9 billion in fiscal year 2016.
Samsung created an automotive electronics interest team a year ago to substantiate enlargeth opportunities in the sector. This year it invested $450 pet in Chinese automanufacturer and rechargeeffectual batteries sturdy BYD Co. Ltd.
Separately, Samsung has held talks delay Fiat Chrysler Automobiles (FCA) aggravate a implicit sale or co-operation for the latter's Magneti Marelli auto space manufacturer, springs enjoy said. The ordinary foothold of those talks is unclear.
The Harman wages is question to regulatory approvals and is expected to delay in mid-2017.
The trade was announced a day following media reports said Lee and different other heads of South Korea's family-owned conglomerates were questioned by prosecutors investigating a collective shame engulfing South Korean President Park Geun-hye.
(Reporting by Hyunjoo Jin and Miyoung Kim; Editing by Edwina Gibbs and Jacqueline Wong)