Samsung has announced its acquisition of Harman International Industries for approximately $8 billion or $112.00 per share in cash.

In Samsung history, this is the biggest acquisition the company made. It also marks the most recent ambitious venture of an established tech firm into the world of Internet of things and it aims to be the key player. 

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The deal is still subject for approval by Harman shareholders and regulators, and it is expected to be completed in mid-2017, SFGate reported. 

Harman is popularly known for building car audio systems under brand names like Harman/Kardon and JBL. However, what Samsung likes about Harman is that it creates connected car business. Harman is the top maker of automobile infotainment systems, integrating navigation, safety solutions, media and smartphone connectivity, and high-end audio systems.

“The primary motivator for Samsung’s purchase of Harman is to tap into its automotive business. This is absolutely about the connected car. Harman are major players in this business and Samsung are not," Jack Wetherill, senior market analyst at Futuresource Consulting, said.

"They know they need to get into it to leverage their IoT (Internet of Things), their smart home and smartphone businesses to effectively spread, develop and maximize their revenues and potential.” 

According to Samsung, it will have an access to Harman’s designers and engineers. It will allow easier and functional collaboration between the two companies. In addition, Harman’s chairman and chief executive Dinesh Paliwal will still run the operation, and the entire management team as well as the company’s facilities will remain, according to Wall Street Journal. 

Harman and Samsung’s deal will give the latter a massive customer base in the automotive industry. The American connected car technology maker will also have an access to Samsung's display technology and other things. The South Korean tech firm believes that the partnership will help the company to become the top player in connected cars as it combines its presence in mobility and Harman’s connected car expertise.

Samsung is not the first company to get into the connected car business. In October, mobile chipmaker Qualcomm bought NXP semiconductors for $39 billion, making an entry to the world of chips for connected cars.

TagsSamsung, Harman International Industries, Samsung Electronics Limited, Samsung Group, Connected Cars, Harman, Internet of Things, automotive business, connected car technology