Harman Purchase

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Samsung Electronics has decided to take over U.S. automotive electronics firm Harman International Industries at a price tag of some 8 billion dollars. Here’s more.

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This vehicle is connected to the Internet, and informs the driver of the best way to reach a destination using real time navigation. The car alerts the driver to any dangers on the road, finds music of his or her preference and recommends places to visit. These in-car features are enabled by automotive electronics, a sector that Samsung Electronics has now officially joined. The Korean tech giant has decided to acquire U.S. automotive electronics firm Harman International Industries at a cost of approximately 8 billion dollars. It's the largest purchase in the history of a Korean firm's takeover of a foreign corporation. Harman is the global leader in the in-car entertainment market. The takeover will allow Samsung to immediately compete with Japanese and German rivals. Pundits believe the decision in part reflects Vice Chairman Lee Jae-yong's determination to branch out to new growth sectors.

[Soundbite] Lee Se-cheol(Tech team, NH Investment & Securities) : "Taking over Harman will serve as a bridgehead for Samsung to enter the auto electronics market. It's also expected to maximize synergy effects among Samsung's existing businesses."

LG Electronics also declared a technological partnership with Volkswagen in July, while Hyundai Motor has launched cooperative ties with the world's largest networking company Cisco. Competition is heating up among Korean conglomerates to gain a foothold in the global connected car market.