Thankfully, it doesn’t look like this deal is as explosive at the Note 7.
In a strong push to in automotive and connected technologies, Samsung Electronics acquired Harman International Industries for $112 per share in cash, or approximately $8 billion. The news was posted in the Samsung Newsroom. This is a strategic move by Samsung, which expects the automotive and connected technologies market to grow more than $100 billion by 2025. According to technology research firm Gartner, one in five vehicles will have “some sort of wireless network connection” by 2020.
HARMAN is the current market leader in connected car solutions, which falls under the Internet of Things. The BBC writes that features currently under development include in-car monitors assessing drivers’ health as they travel. There are also automatic leaving and arriving alerts for friends and family being worked on. The BBC also writes that campaigners are highlighting potential data privacy issues surrounding connected vehicles.
As more and more cars will likely feature internet connections, the FBI warned that car hacking is a real risk. Car makers and connected cars manufacturers haven’t addressed the issue. The Public Service announcement issued by the Department of Transportation and the National Highway Traffic and Safety Administration read,
“Modern motor vehicles often include new connected vehicle technologies that aim to provide benefits such as added safety features, improved fuel economy, and greater overall convenience. Aftermarket devices are also providing consumers with new features to monitor the status of their vehicles. However, with this increased connectivity, it is important that consumers and manufacturers maintain awareness of potential cyber security threats.”
Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics, released a statement,
“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. As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognized portfolio of best-in-class products, HARMAN immediately establishes a strong foundation for Samsung to grow our automotive platform. Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed deep respect for him, his strong senior leadership team and HARMAN’s talented employees. HARMAN’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”
Young Sohn, President and Chief Strategy Officer of Samsung Electronics, added,
“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade. We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized 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.”
The boards of directors of both companies approved the deal. The deal is expected to be completed in mid-2017.