​Samsung to acquire US automotive firm Harman for $8 billion

Samsung will buy US auto parts maker Harman International Industries for $8 billion in an all-cash deal, the company has announced.

The deal is the South Korean tech giant's biggest in its history and will immediately make the firm a major player in the growing connected car market.

Samsung will by Harman for $122 per share in cash, or total equity value of around $8 billion. The deal will close mid-2017 after regulatory and shareholder approval, the company said.

Samsung added that the purchase will give it a significant presence in the large and rapidly growing market for connected car technologies, particularly automotive electronics, which has been a strategic priority for the firm.

Harman, founded in 1953, is a pioneer in audio systems, and has been expanding into automotive rapidly in recent years. It has contracts with autogiants General Motors and Fiat Chrysler.

Over 30 million vehicles use its embedded infotainment, telematics, safety, and security solutions, the firm said in its joint statement with Samsung. Around 65 percent of Harman's $7 billion reported sales for the year ended September 30 were related to automotives, it said. Its order backlog in the automotive market was $24 billion as of June 30.

Harman's experience and clout in the automotive industry combined with Samsung's in mobility, semiconductors, user experience, displays, and global distribution channels will create significant growth opportunities, the firms said.

Samsung is the world's largest electronics maker in revenue, and is number one in phones, memory chips, and TVs in global market share. It also produces batteries and displays via its group affiliates that are already being supplied to car-making clients.

Samsung joins fellow IT giants Apple, Google, and Uber as companies who are pushing into the connected cars industry.

Autogiants themselves are actively trying to converge new IT services to their existing portfolio. Earlier this month, South Korean autogiant Hyundai announced plans to build a datacentre in Guangzhou, China to service connected cars there.

In July, Samsung bought a stake in China's BYD to supply the latter with its automotive chip solutions.

The South Korean tech giant built automobiles during the 90s but sold the business due to the Asian Financial Crisis.