Samsung Electronics Friday announced it has completed the previously announced acquisition of Harman International. Under the terms of the merger agreement, HARMAN stockholders will receive $112.00 per share in cash. The completion follows the satisfaction of all conditions to the closing of the transaction, including approval of the transaction by HARMAN stockholders and receipt of all necessary regulatory approvals in the United States and certain foreign jurisdictions.
“Today is a historic moment for us. The close of this transaction opens the door to create substantial growth opportunities and deliver greater benefits for customers worldwide,” said Young Sohn, president and chief strategy officer of Samsung Electronics and chairman of the board, HARMAN. “We see transformative opportunities in the car – and a future which seamlessly connects lifestyle across automotive, home, mobile and work. Samsung’s and HARMAN’s leadership in these spaces perfectly positions Samsung to be the preferred partner to our OEM customers. In addition, bringing together HARMAN’s iconic audio brands and capabilities paired with Samsung’s leading display technologies will deliver enhanced audio and video experiences to consumers and professional end markets. And most importantly, we are enthusiastic about our common vision, the similarities in our culture of innovation, and the added value we can create for customers. We look forward to working with all of HARMAN’s employees to execute on our vision.”
Quotes for press releases are written, re-written and then edited over and over. Well, this one speaks volumes — this is the president of Harman — and he ONLY references the automotive aspects of this acquisition. He could have added a small, short statement about the ProAV stuff but, he specifically did NOT. This was not by accident.
“We are excited to have completed the transaction, which provides compelling cash value to our stockholders, benefits our customers and provides new opportunities for our employees,” said Dinesh Paliwal, HARMAN president and CEO. “Samsung shares our commitment to our customers and our culture of speed, innovation and execution. Samsung provides HARMAN with the scale, platform and complementary technologies to accelerate growth and extend our global market leadership in automotive, smart audio and connected technologies. Recognizing the importance of partnerships in an increasingly connected world, particularly in automotive, we are poised to leverage our combined teams and resources to produce even greater value for our customers. Working closely with automakers and other technology companies, Samsung and HARMAN will define — and drive — the future of automotive.”
Clearly, there is a desire to leverage the high-end home audio brands — which Harman has always done via the automotive partnerships but, the commercial AV brands, it seems, will likely be spun-off or sold.
In connection with the completion of the transaction, HARMAN’s common stock will cease trading prior to market open on March 13, 2017 and will be delisted from the New York Stock Exchange. HARMAN will operate as a standalone Samsung subsidiary, overseen by a Board of Directors led by Mr. Sohn. Mr. Paliwal will remain CEO of HARMAN, leading the Company with his management team, and will continue to serve as a member of its Board. Samsung is retaining HARMAN’s work force, headquarters and facilities, as well as all of its consumer and professional audio brands.
I hope I am wrong, but this release clearly defines the Samsung acquisition in terms of the automotive group by everyone. With all the uncertainty and concerns inside Harman itself as well as throughout the ProAV community, this was an opportunity to state, unequivocally, that the ProAV brands will stay.
But they didn’t. Let’s not pretend the 800-pound gorilla isn’t standing in the room. In fact, he’s locked the door.