Samsung Electronics said Monday it will acquire US connected car system provider Harman International Industries to accelerate its push into the smart car business.

It is the largest-ever merger and acquisition of a foreign firm by a Korean company.

The tech giant said it will acquire Harman for $112 per share in cash, for a total equity value of approximately $8 billion.

The transaction, which is subject to approval by Harman shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017.

Harman is a tech company specializing in connected car solutions, with more than 30 million vehicles currently equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security. 

Approximately 65 percent of Harman’s $7 billion of reported sales last year were automotive-related.

“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,” said Samsung Electronics CEO Kwon Oh-hyun.

Harman Chairman Dinesh Paliwal said, “Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman’s technology leadership and long-standing customer relationships will enable OEMs (original equipment manufacturers) to provide new offerings to their customers.”

Samsung said it plans to combine Harman’s new connected car technologies including those that span infotainment, cybersecurity, over-the-air updates and telematics with Samsung’s expertise in connectivity technologies including 5G, user experience and interface, display technology and security solutions.

“We will enhance Harman’s automotive and connected services businesses to drive greater sales and provide significant benefits as automakers speed up the adoption of next-generation connected cars,” a Samsung’s official said.

Harman will operate as a standalone Samsung subsidiary and continue to be led by Dinesh Paliwal and the current management team, Samsung said.

Samsung also plans to retain Harman’s workforce, headquarters and facilities, as well as all of its consumer and professional audio brands.

The Korean tech giant said it believes the transaction will give the company a significant presence in automotive electronics, which has been a strategic priority for Samsung, and is expected to grow to more than $100 million by 2025.

Samsung has pushed automobile technologies and infotainment systems since it created a team to develop automotive-related businesses in late 2015. The tech firm also acquired for $455 million a 2 percent stake in BYD, the Chinese electric vehicle and battery-maker, in July this year.

By Shin Ji-hye (shinjh@heraldcorp.com)