UPDATED 03:04 EST / NOVEMBER 15 2016

harmon NEWS

Samsung snaps up audio and connected car firm Harman for $8 billion

Samsung Electronics Co. Ltd. has acquired car audio and electronics maker Harman International Industries Inc. for $8 billion.

Founded in 1980, Harman is best known as a maker of car radio and music players. Over the last few years, it has shifted into making smart car devices that offer services such as embedded entertainment, telematics, connected safety and security.

The company claims that its connected car solutions are now installed in 30 million vehicles and that 65 percent of its $7 billion of its annual sales are automotive-related, with an order backlog of $24 billion as of June 30. Along with making car products, Harman also offers general purpose audio and visual products, enterprise automation, and connected services under brands including AKG Acoustics, AMX, Crown Audio, Harman/Kardon, Infinity, JBL, JBL Professional, Lexicon, Mark Levinson, Martin, Revel, Soundcraft and Studer.

“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,” Samsung Vice Chairman and Chief Executive Officer Oh-Hyun Kwon said in a statement. “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.”

The deal is part of a push by Samsung to grow its presence in the fast-growing smart car market, one in which it has only a small presence currently compared with Google Inc.’s Android Auto and Apple Inc.’s CarPlay. Harman immediately gives Samsung a large installed base and in-car technology that could help improve Samsung products. For example, Harman-manufactured devices could end up in higher-resolution Samsung displays.

Harman will continue to operate as a stand-alone division. The acquisition is subject to approval by Harman shareholders, regulatory approvals and other standard closing conditions. The deal is expected to close in mid-2017.

Image credit: Harman

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