Anchor: Samsung Electronics agreed to purchase U.S. automotive electronics provider Harman International Industries for eight billion dollars. It is the South Korean smartphone maker's first major acquisition since Vice Chairman Lee Jay-yong became a board member of Samsung Electronics. The purchase is expected to give Samsung a leg up in the connected car market.
Our Kim In-kyung has more.
Report: Samsung Electronics has agreed to acquire U.S. auto component supplier Harman International Industries for eight billion dollars.
Samsung will purchase Harman, which provides connected car technologies, for 112 dollars a share, or a total of around nine-point-four trillion won, which is the largest acquisition for a South Korean company to date.
Samsung's board on Monday approved the deal, which is expected to be completed by September 2017.
Lee Se-cheol, an analyst at NH Investment and Securities, said the purchase reflects Samsung Vice Chairman Lee Jay-yong's decision to invest in new-growth businesses.
[Sound bite: Lee Se-cheol - analyst, NH Investment and Securities (Korean)]
"Samsung has secured a beachhead in automotive electronics by acquiring Harman. It will also maximize synergies with existing businesses."
Samsung said the acquisition has provided the basis for it to become a global leader in the online-connected auto parts market, which is growing at an average of nine percent annually.
Other South Korean conglomerates have bet on the future of connected cars. LG Electronics announced a technical tie-up with Volkswagen in July while Hyundai Motor partnered with Cisco Systems to develop Internet-connected car technology.
The global market for connected car solutions is expected to grow from 45 billion dollars last year to 100 billion dollars by 2025.
The overall market for smart car electronics is projected to surge from 54-point-two billion dollars in 2015 to 186-point-four billion dollars by 2025.
Kim In-kyung, KBS World Radio News.
Source: KBS World Radio