Harman International Industries Inc (NYSE:HAR) stock was up on Monday following news of a deal with Samsung.
Harman International Industries Inc stock was up after the company announced that Samsung plans to acquire it for $112 per share in cash. This represents an almost 28% premium over HAR stock’s closing price on Friday, Nov. 11, 2016. The deal will be completed with cash on hand and has been approved by both companies’ Boards of Directors.
The total equity value of the deal with Samsung values Harman International Industries Inc at $8 billion. The company develops technology for use in vehicles. It reported sales of $7 billion for its last 12 months ended on Sept. 30, 2016. 65% of this came from its vehicle-related efforts.
Samsung is expecting several benefits from the proposed acquisition of Harman International Industries Inc. This includes better market penetration in the automotive and audio industry. It also claims that it will benefits from HAR’s professional connections, as well as its 8,000 software designers and engineers working on Internet of Things efforts.
The deal to acquire Harman International Industries Inc will have it acting as an standalone subsidiary of Samsung. Dinesh Paliwal, Chairman, President and CEO of Harman International Industries Inc will continue to lead the company after the acquisition. HAR will also keep its current management team.
Samsung will also have Harman International Industries Inc retain its current work force, headquarters and facilities after the acquisition. The company will work closely with Samsung’s Automotive Electronics Business Team.
Samsung will need regulator and shareholder approval before the deal can be completed. If it gets this, it expects the deal to close in mid-2017.
HAR stock was up 25% as of Monday afternoon.
