Samsung Electronics to Acquire HARMAN for $112 per share – Details

The South Korean Giant, Samsung Electronics is all ready to acquire HARMAN International Industries and both of them have come to an agreement and have announced the same. Samsung will be purchasing HARMAN for $112 per share and the total equity value of approximately $8 Billion. After this transaction is completed, Samsung will immediately get a significant presence in the automotive electronics.

As you know, HARMAN is a leader in the market in connected car solutions with more than 30 million vehicles equipped with its connected car and audio systems. With this new acquisition, Samsung will be looking forward to creating growth opportunities in the connected mobility, semiconductors, displays, user experience and its global distribution channels.

Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics said, “HARMAN perfectly complements Samsung regarding technologies, products, and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time,”

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. Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed a deep respect for him, his strong senior leadership team and HARMAN’s talented employees. HARMAN’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”

Young Sohn, President and Chief Strategy Officer of Samsung Electronics acknowledged that the vehicle of tomorrow would be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade. We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow. Working together, we are confident that HARMAN can become a new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.

Dinesh Paliwal, who is the Chairman, President, and CEO of HARMAN said that This compelling all-cash transaction would deliver significant and immediate value to our shareholders and provide new opportunities for our employees as part of a larger, more diversified company.

With today’s announcement, HARMAN will be providing benefit to the automotive customers and consumers. He also mentioned that with the combination of Samsung’s strength of leading-edge displays and HARMAN’s customer relation will bring more OEMs to provide new offerings for its clients.

This agreement will expand the business and moreover, Samsung will get access to HARMAN’s 8000 software designer and engineers who are unlocking the potential of the loT market. It will also generate next generation of cloud-based customer and enterprise experiences. After the agreement closes, Dinesh Paliwal will continue to lead HARMAN’s current team and will be operating as standalone Samsung subsidiary.

The transaction will carry on with cash on hand to fund the transaction, and the agreement has been unanimously approved by the board of directors of Samsung and HARMAN. The purchase price is represented by a premium of 28 percentage based on HARMAN’s closing stock price on November 11th, 2016 and 37 percentage to HARMAN’s 30-calendar day volume weighted average price ending on 11th of November 2016.

This transaction is expected to be closed in mid-2017 and Samsung along with HARMAN will host a webcast presentation on November 14th to discuss the transaction at 8 AM and the links to the webcast, and accompanying documents will be available on Samsung Investor relation website and HARMAN’s Investor relation website.