Samsung purchases connected car firm Harman for $8bn in cash 0

samsung-purchases-connected-car-firm-harman-for-8bn-in-cashSamsung has made a major move into the connected car technology realm by purchasing automotive electronics maker Harman International Industries for a reported $8bn (£6.4bn).

The offer of $112 per share is a 28% premium to the closing price of Harman stock posted at the close of trading on Friday. This marks the largest overseas purchase by a South Korean company.

Samsung have previously said that the development of automotive electronics was “a strategic priority”.

The connected technologies market is predicted to expand significantly over the next few years. Growth of $100bn is expected by 2025.

“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,” Young Sohn, Samsung’s president and chief strategy officer, said in a statement.

It’s been a difficult period for Samsung recently. The company was forced to initiate a huge recall of its Galaxy Note 7, after it was revealed to be a fire hazard. This saw an enormous drop in profits after production of the device had to be halted. The reputation of the company has suffered as a result of the controversy.

The majority of Samsung’s business comes from its Smartphone sales, but the company is looking to diversify and expand into other markets.

In 2015, the company formed a business division focused on automotive electronics. Investment was also made into Chinese carmaker, BYD.

Harman International Industries is based in Connecticut, and makes products used in upwards of 30 million vehicles. The deal should be finalised by mi-2017. The current chief executive, Dinesh Paliwal will remain in charge.

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