Samsung has announced it will acquire Harman International Industries for about $8bn. The deal would mark the South Korean company's presence in the rapidly growing automotive electronics market.
The all-cash transaction is expected to close in mid-2017.
Samsung will utilise Harman's 8,000 software designers and engineers to "deliver the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data and devices".
Harman will operate as a standalone subsidiary of Samsung, and would be led by Dinesh Paliwal, chairman, president and chief executive officer of Harman. He will also head the company's current management team. Samsung plans to retain Harman's workforce, headquarters, facilities, consumer and professional audio brands.
Samsung's automotive electronics business team, established in 2015 December, would work with the management team of Harman, the company said.
Based in Stamford, Connecticut, Harman designs connected products for consumers, automakers and enterprise, including audio, visual and infotainment systems. The company has more than 30 million vehicles currently equipped with its connected car and audio systems including embedded infotainment, telematics, connected safety and security.
About 65% of Harman's $7bn sales during the 12 months that ended on 30 September, 2016, related to the automotive sector. Harman's in-vehicle technologies are expected to create significant growth opportunities for the combined business by enabling it to leverage Samsung's connected mobility, semiconductors, user experience, displays and its global distribution channels.
Samsung expects the combined business to deliver significant growth and benefits to consumers. Harman's new connected car technologies along with Samsung's connectivity technologies including 5G, UX/UI, display technology and security solutions, will enhance Harman's automotive and connected services business to garner sales, hopes the South Korean tech major.
In addition to that, Harman's audio systems including JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity and Revel are expected to enhance the competitiveness of Samsung's mobile, display, virtual reality and wearable products to deliver unique audio and visual experience for consumers.
"We see substantial long-term growth opportunities in the auto technology market as demand for Samsung's specialised electronic components and solutions continues to grow. Working together, we are confident that Harman can become a new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem," said Young Sohn, president and chief strategy officer of Samsung, in a statement.