Samsung has acquired connected car tech firm Harman for $8 billion in what is the South Korean company’s largest ever acquisition.
Harman produces various types of connected technologies for vehicles, and Samsung, which relies heavily on its smartphone division to generate revenue, looks to be trying to expand into other markets with this latest acquisition.
The firm said it made the move to give it a “significant presence in the large and rapidly growing market for connected technologies, particularly automotive electronics.”
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Last year, Samsung created a new business division specifically for automotive electronics, and, in the wake of the Note 7 debacle, will be looking to take advantage of the connected technologies market, which is expected to grow to $100bn by 2025.
Young Sohn, Samsung’s President and Chief Strategy Officer, said in a statement: “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.”
Harman technology, including “embedded infotainment, telematics, connected safety and security,” is currently used in more than 30 million vehicles.
Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics, said: “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.
“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.”
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Samsung says the deal will result in new innovation across product categories, and that “mobile, display, virtual reality and wearable products” will be able to “deliver a fully differentiated audio and visual experience for customers”.
The firm also plans to make use of Harman’s 8,000 software designers and engineers to bolster its efforts in the Internet of Things market.
The deal itself is expected to be finalised in mid-2017, with Harman’s current chief executive, Dinesh Paliwal, remaining in his post.
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Let us know what you think of the deal and what it could mean for Samsung in the comments.