Samsung Electronics Co. has issued a news release announcing it will purchase Harman International Industries, parent company of several pro audio and lighting brands, including Harman/Kardon, JBL, and Martin Professional.
The companies have entered into a definitive agreement under which Samsung will acquire Harman for a total equity value of approximately $8.0 billion, according to the release.
Samsung's primary interest seems to be in automotive: “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,” says Oh-Hyun Kwon, vice chairman and CEO of Samsung Electronics. “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.”
Mats Karlsson, who worked for Martin Professional for many years and is now managing director and partner of his own firm, Intendor AB, comments that "Samsung—$300B in sales—buys Harman—$8B in sales—who in turn owns Martin—$200M in sales. Martin products represents 0.07% of Samsung sales. This deal is all about consumer and automotive. Samsung, by their admission, needed a short-cut to the buoyant automotive electronics market and Harman’s automotive division is a leading player there. The pro-AV side of Harman—JBL, Crown, Soundcraft, Martin, AMX, and more—is just a 'collateral acquisition,' too small to even get mentioned in the press release. Time will tell if the professional brands will stay or be sold off, but I suspect Samsung is in no rush to decide on that."
The announcement does, however, also point to the professional audio brands specifically, stating that JBL®, Harman Kardon®, Mark Levinson®, AKG®, Lexicon®, Infinity®, and Revel® will contribute to Samsung’s mobile, display, virtual reality, and wearable products "to deliver a fully differentiated audio and visual experience for customers."
Samsung says the combined company’s platform will expand via its ability to deliver integrated, large-scale audio and visual solutions at stadiums, concert facilities, and other performance centers such as The John F. Kennedy Center for the Performing Arts and Staples Center, home of the Grammy Awards®.
Stay tuned for updates and industry reactions.