Another Monday, another day it seems has come for big purchases in the tech industry. This time we return to the much talked about tech giant this year- today it was announced that Samsung Electronics would buy Harman International Industries for a smooth $8 billion.
“An M&A deal this big is a first for us. But it shows that under Jay Y. Lee, the company is changing and open to new ways to grow,” a source familiar with the deal told Reuters, referring to Samsung Electronics’ vice chairman.
The purchase of the Connecticut-based maker of audio systems comes in direct in line of Samsung’s efforts to expand its areas of R&D (Research and Development) and finding new growth markets for the company. After the Note 7 fiasco, Samsung realised it cannot depend solely on its mobile phone sales; expanding its markets is a must. Samsung is buying Harman for $112 per share in cold hard cash, quite the steal for Harman after its shared were actually valued at $109 dollars on Monday.
The HDC Asset Management fund manager Park Jung-hoon stated:
“Samsung is using its huge cash pile to pull ahead of rivals in the auto technology market. But it remains to be seen whether Harman will be able to grow into a company that will be able to compete with the likes of Bosch and Continental.”
The Harman acquisition, which is subject to regulatory approvals, is expected to close in mid-2017.
