WASHINGTON — Samsung Electronics will pay $8 billion in cash to buy Stamford, Connecticut-based Harman International Industries, a company with D.C. roots.
Harman International, long headquartered in Washington, moved its corporate headquarters to Connecticut in 2008. In the 1950s, Sidney Harman, a former U.S. undersecretary of commerce, founded Harman Kardon along with engineer Bernard Kardon. The two were credited with bringing the first all-in-one stereo to consumer living rooms.
Sidney Harman died in 2011 at the age of 92. His wife, Jane Harman, served as a U.S. representative for California from 1993 to 1999.
Harman Kardon grew through a series of acquisitions over the decades, acquiring brands such as JBL and Infinity.
In recent years, the company has transformed itself into a leading manufacturer of infotainment systems, navigation systems and on-board computers for the auto industry.
Harman more recently made news in D.C. when he purchased the struggling Newsweek magazine’s operations from The Washington Post in 2011 for just $1.
For Samsung, the acquisition will place the company squarely in the connected-car business, which is expected to grow to more than $100 billion by 2025.
More than 30 million vehicles are currently equipped with Harman’s connected car, infotainment and audio systems.
“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,” Young Sohn, president and chief strategy officer of Samsung Electronics. said in a statement.
“We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow,” Sohn said.
When Samsung’s acquisition is completed, Harman will operate as a stand-alone Samsung subsidiary and keep its headquarters and current management team in Connecticut.
The $8 billion acquisition price is a 28 percent premium over Harman’s market value, sending its stock (NYSE: HAR) up $22.03, or 25 percent, to $109.67 per share in Monday trading.
