Samsung Electronics has agreed to buy American Harman for $8 billion – Vedomosti

Samsung agreed to pay for each share of electronics manufacturer for the automotive industry, Harman International Industries for $ 112 cash (prize to the quoted prices at the close of trading on Friday is 27.8%). Since the beginning of the year, the shares of Harman fell by 7%. The deal with Samsung should be approved by the stockholders of Harman. It is expected that after its completion, Harman will operate as an independent subsidiary of Samsung.

Registered in Stamford (CT) Harman in the 1950s, was a pioneer in the market of audio Hi-Fi, now she has diversified his business and has become a world leader in the segment of automotive electronics, focusing on high-end multimedia and navigation systems, and visualization. To this end, it implemented a series of major acquisitions, including last year’s purchase Symphony Teleca for $ 789 million.

Now Harman on the car market accounts for about two thirds of total revenue. Total sales for the last 12 months amounted to $ 7 billion, in June the volume of orders received reached $ 24 billion of Harman Products equipped with more than 30 million cars driving on the roads of the world, the company is a partner of such auto giants as General Motors, Fiat Chrysler, BMW and Mercedes-Benz.

“Harman perfectly complements a range of technologies, products and solutions, Samsung and a merger would be a natural continuation of the strategy that we follow in the automotive market,” says Samsung Electronics CEO Oh-Hyun Kwon. Manual Samsung claims that this deal will provide the Korean Corporation “visible in a large and fast growing market of web-connected systems, especially in the automotive industry”.

Partner Luxoft

Harman – since 2006-partner of the Russian offshore developer Luxoft, writing in the report, analysts at JPMorgan. According to them, Harman is the third largest customer of Luxoft. In the third quarter ended in September, contracts with Harman brought Luxoft to about 6% of revenue.

“Samsung demonstrates the desire to conquer the market of components for automotive industry, using its achievements in the IT sector, says an analyst from NH Investment Securities Lee Segal. – Market vehicles have the prospects do not inspire confidence, so they prefer to have separate subsystems.”

young Seon, a Director at Samsung strategy, stresses that a new generation of vehicles will differ from the previous more perfect intelligence as well as modern smart phones differ from ordinary phones made over 10 years ago.

Expansion of Samsung on the market may complicate the relationship of the Korean company against Apple and Google (parent company Google). Both of these American corporations are already as partners, and competitors Samsung. Apple and Google, as well as new players like Tesla Motors, Uber Technologies and actively trying to change the balance of power in the market, developing self-driving cars. In addition, new for the Korean company automotive systems it will have to compete with players such as Denso (main supplier of Toyota Motor), Robert Bosch and Autoliv. Annual revenues from the leaders in this market exceed $ 20 billion, allowing them to invest significant amounts in research and development of new technologies. Samsung is already present in this market, supplying lithium-ion batteries for automakers like Nissan Motor, and memory chips that are now embedded in almost all smart devices.