You have almost certainly heard the name Harman when it comes to audio products, but the company has spent the last few years getting big into automotive technology as well. That's what piqued Samsung's interest in the company, and now the Korean tech giant is putting a lot of cash on the table to become a player in connected car tech. The $8 billion deal will be Samsung's biggest acquisition to date when it closes.
Harman owns a number of brands; most prominently JBL, but also Crown, AMX, DigiTech, and others. Harman CEO Dinesh Paliwal began moving into automotive multimedia a few years ago, and now about 64% of Harman's $7 billion annual revenue comes from connected cars, including contracts with General Motors and Fiat-Chrysler. This deal will instantly bring Samsung into the connected automotive market—insert your preferred joke about exploding car batteries here.
Samsung expects to have the deal done around the middle of 2017. Both boards have approved the sale, which is all cash. It's paying a 28% premium on the value of Harman's stock price as of last week. Yeah, Samsung might be taking a loss on the Note7 fiasco, but it's still got plenty of money in the bank. Samsung plans to continue operating Harman as an independent subsidiary under Dinesh Paliwal.