SEOUL, Feb. 13 (Korea Bizwire) – Shareholders of Harman International Industries Inc. will hold a meeting later this week to vote on a deal by Samsung Electronics Co. to acquire the U.S. car technology firm, according to industry sources Monday.
In a deal worth US$8 billion, Samsung announced last November that it would buy Harman to secure “a significant presence in the large and rapidly growing market for connected technologies, particularly automotive electronics.”
Harman is set to hold a meeting of shareholders Friday (local time), and the deal with Samsung is on the agenda for the meeting, sources said.
Under the deal, Samsung will buy Harman for $112 per share, or a 37 percent premium to its 30-day average closing stock price.
Some shareholders of Harman, including Atlantic Investment Management, which owns a 2.3 percent stake, have said they would vote against the deal, arguing the price is too low.
Some shareholders of Harman also filed a class-action suit against the company’s chief executive, saying the deal’s price fell short of Harman’s corporate value.
The lawsuit, filed with the Delaware Chancery Court, criticized Harman Chairman and CEO Dinesh Paliwal and other directors for allegedly breaching their fiduciary duty.
Samsung officials said the lawsuit is a matter that should be dealt with by Harman’s board of directors.
In Seoul, some analysts don’t expect the moves by Harman shareholders to disrupt the deal.
Kim Dong-won, an analyst at KB Securities in Seoul, said, “There will be nothing wrong with the deal” as Samsung and Harman have already secured sufficient friendly shareholders.
If the deal is approved by Harman shareholders, it should get approval from antitrust regulators from the United States, the European Union and China.
Industry observers said Samsung could easily win approval from the antitrust regulators because the deal may not create a monopoly.
The deal, which would mark the largest buyout by a South Korean company in history, was the first major acquisition by Samsung since the company’s heir apparent, Vice Chairman Lee Jae-yong, joined the board of the electronics giant.
Analysts said the deal would provide Samsung with an advantage in making a foray into the automotive electronics industry amid tougher competition with global players, such as Germany’s Bosch and Japan’s Denso.