Samsung to Buy Harman for $8 Billion

Samsung is spending $8 billion to buy its way into a burgeoning market for automotive technology alongside Apple and Google, according to Bloomberg. The company is making its largest-ever overseas acquisition with an offer for Harman International Industries, angling to become the go-to supplier of everything from in-car entertainment to connected-auto services. It comes days after Samsung Group heir-apparent Jay Y. Lee formally ascended to the board of the electronics firm, a move expected to shore up his influence over the family-run conglomerate’s prized asset.

The Harman acquisition will lift Samsung into the top ranks of auto technology suppliers and give it existing relationships with BMW, Volkswagen and General Motors. While Harman became a legendary name in high-end audio equipment, it’s pushed deeper into automotive supplies and now gets 65 percent of sales from the sector. Samsung’s $112-a-share offer stood 28 percent above Harman’s closing price of $87.65 in New York on Friday.

The Korean company joins a growing list of global technology companies moving into automobiles. The companies see cars as an industry that hasn’t yet been remade by software and online technologies. But outside of Elon Musk’s Tesla, the efforts haven’t yet reached customers. Google has for years been working on self-driving software but its systems haven’t yet reached the market. Apple went on a hiring spree to add staff to build its own car before recently re-calibrating the initiative to focus more on software, leading to job cuts. Uber Technologies joined the fray over the past year, hiring engineers and making acquisitions to build its own autonomous car technology.

Samsung itself has bought a stake in Chinese electric-car maker BYD and at one point considered an offer for sections of Fiat Chrysler Automobiles’ parts unit, a deal said to have broken down just weeks ago. With the Harman purchase, it’s taking a different approach that’s more in keeping with its history has a component maker. Rather than designing a car or building a self-driving system, Harman’s technology focuses on the growing number of services available as automobiles get connected to the internet, navigation, multimedia entertainment, security systems and analytics tools.