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Samsung is seeking to move into the automotive technology industry with the $8 billion acquisition of audio company Harman International Industries, the company announced Monday.
The South Korean electronics manufacturer agreed to pay all cash for the Connecticut-based audio company, and the acquisition is the largest in Samsung’s history, according to The Wall Street Journal. Samsung currently has around $70 billion in cash reserves, which it plans to use to fund the transaction.
Harman International Industries, who owns audio brands like Harman Kardon, JBL and dbx, has made an aggressive push into the automotive technology world in recent years, an industry which is becoming increasingly of interest to large tech companies.
“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,” Samsung CEO Oh-Hyun Known wrote in a press release.
The merger is bound to set up a strong foundation on which Samsung can build their automotive technologies, the company said. For their part, Samsung added that its displays, user interface and semiconductor technology would create “significant growth opportunities” for Harman’s automotive tech business, according to the press release.
Samsung is not the only tech company to try to vie for dominance of the automotive world. Companies like Google and Apple have long been trying to develop car technologies — although their efforts have mostly been focused on improving self-driving platforms. Apple, for example, recently announced that it would scale back its automotive program, shifting its focus to developing software for other car manufacturers instead of trying to develop its own electric vehicle, the Verge reported.
Samsung reportedly paid a 28 percent premium over the company’s current share price, and Harman’s revenue is expected to double over the next five years. While Harman has been a pioneer in the audio industry since 1953, around two-thirds of its current revenues come from the auto industry. For Samsung, who decided that breaking into the automotive market internally would take too long, began discussing the deal with Harman over the summer. The acquisition is expected to close sometime in mid-2017, Engadget reported.