Samsung might be sore from losing billions on the Galaxy Note 7, but it certainly isn’t being conservative with its cash. The company today confirmed a deal to acquire automotive electronics maker and audio expert Harman International Industries for $8 billion.
The deal works out at $112 per share, which is 28 percent more than Harman’s closing price on Friday, and Samsung will be making the payment in cash. It’s the South Korean firm’s biggest acquisition to date.
Harman is well known for its Harman Kardon audio division and brands like JBL, but that’s not what Samsung is most interested in. Instead, the company is focused on its automotive technology, which Samsung says is “a strategic priority.”
“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,” said Young Sohn, Samsung’s president and chief strategy officer, in a statement.
Harman CEO Dinesh Paliwal added that “Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers.”
A new venture for Samsung
Most of Samsung’s revenue comes from its smartphone business, but with its purchase of Harman, it instantly becomes a major player in the autonomous vehicle industry dominated by the likes of General Motors, Volvo, and more recently Apple and Google.
Harman’s automotive technology, which includes in-car entertainment systems, safety and security devices, and more, can be found inside vehicles from BMW, Volkswagen, and other major car manufacturers.
Samsung’s acquisition is expected to be finalized in mid-2017.