Samsung to buy U.S. Auto-parts supplier Harman for $8bn

Samsung Electronics Co. is making a drive for control of the car. The South Korean smartphone maker said Monday that it would buy U.S. auto-parts supplier Har- man International Industries Inc., based in Stamford, Conn., for $8 billion in an all-cash deal that instantly makes Samsung a major player in the world of automotive technology.

The deal—Samsung’s biggest acquisition in its history—reshapes the pecking order in the global au- tomotive supply chain, reflecting a quickening pace of innovation and an increased role for compa- nies with deep pockets and a keen understanding of mobile services. Harman, an audio pioneer that dates back to 1953, has in recent years pushed aggressively into the automotive world under Chief Executive Dinesh Paliwal, and has secured billions in new business, including big contracts with General Motors Co. and Fiat Chrysler Automobiles NV.

It has projected an order backlog of $24 billion, more than three times an- nual revenue, and about two-thirds of its current sales come from auto makers. Harman has also diversified into software development and components for connected cars. Much of that has been done on the shoulders of major acquisitions such as a $780 million deal last year for Mountain View, Calif.-based software services company Sym- phony Teleca.

In a statement, Mr. Paliwal said linking up with Samsung would give the two companies an edge in a competitive field. “Partnerships and scale are essential to winning over the long term in [the] automo- tive” industry, he said. By becoming a direct supplier to the world’s biggest automakers, Samsung will gain insight into the changing behavior of consumers as the lines blur between the auto and mobile industries.

The acquisition pushes Sam- sung’s complicated relationship with Apple Inc. and Google parent Alphabet Inc.—the South Korean company serves as both a partner and a rival—into a new arena. Apple, Google and technology upstarts such as Tesla Motors Inc. and Uber Technologies Inc. are all trying to reshape the auto industry and have been working on selfdriving cars. Samsung will now have a place among names like Denso Corp., a major supplier to Toyota Motor Co., German mega-supplier Rob- ert Bosch GmbH and Sweden’s Autoliv Inc., a safety-components supplier that has benefited from troubles caused by rival Takata- Corp.’s air-bag recalls.