Samsung splashes $8bn on connected cars company

 
Lynsey Barber
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Samsung has snapped up US firm Harman (Source: Getty)

Samsung is stepping up its drive into the world of connected cars, splashing billions of dollars on a company specialising in the technology.

The $8bn deal for US firm Harman International Industries, an offer of $112 per share, is a 28 per cent premium on the firm's Friday closing price on the New York Stock Exchange.

Harman, which was the target of a similarly valued takeover deal by private equity firm KKR back in 2007, makes technology across the so-called Internet of Things (IoT). The majority of its business comes from connected car devices, including audio, telematics and security.

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It already has deals in place with many big car manufacturers such as BMW, Chrysler, Mercedes and Volvo as well as audio companies such as Bang & Olufsen.

“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,” said Samsung Electronics vice chairman and chief executive Oh-Hyun Kwon, adding that it "immediately establishes a strong foundation for Samsung to grow our automotive platform".

Chief strategy officer Young Sohn said: “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.

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“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."

The deal is expected to close in the the third quarter of 2017, subject to shareholder and regulator approval.

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