Harman Industrial acquires Bang & Olufsen for $156 million

Article by Christian A., on June 1, 2015

For $156 million, Harman Industrial Industries Inc. has completed its acquisition of Bang & Olufsen Automotive. The deal was first announced last March by Harman, which supplies infotainment, audio and software services. Bang & Olufsen Automotive is a known supplier of audio products to luxury automakers.

In a Bloomberg report last March, we learned that it will cost Harman a total of 145 million euros ($156 million) to acquire the unit as well as pay for the technology license fees. Bang & Olufsen A/S shared that it intends to sell its automotive sound-system business to Harman International Industries Inc. (U.S. maker of JBL audio equipment) as it undergoes a reorganization to concentrate on consumer electronics.

After the announcement was made, the stock of Bang & Olufsen stock rose to its highest level in nearly 25 years. In a separate report, Bang & Olufsen said that it will sell its minority stake in drug-dispensing equipment maker Medicom and is considering options for its ICEpower amplifier unit.

Last December, Danish newspaper Berlingske reported that Ole Andersen, the chairman of Struer-based Bang & Olufsen, said that the company is too small to remain independent and so it must either look for partners or scale back business areas.

In a statement, Bang & Olufsen said that to lessen the complexity within the company and to put its focus on the consumer business, it sought to make a further assessment of ownership of assets that are not core to this strategy.

Because of this deal, a 40% surge was experienced by Bang & Olufsen to 70 kroner, the most sudden intraday increase since at least April 1990. This year, the stock has gained 87%.

The Danish company said that Harman, which makes AKG and Harman Kardon systems, will have to pay the annual fee of at least 12.7 million kroner ($1.82 million) to exclusively use Bang & Olufsen and B&O Play stereo technology in vehicle sound systems over 20 years.

Harman plans to offer the Bang & Olufsen products to manufacturers of high-end cars and target B&O Play to the “mass luxury market.”

This agreement means that Harman gains automaking customers like BMW AG, Volkswagen AG’s Audi division and Daimler AG’s Mercedes-Benz brand. Bang & Olufsen will be able to keep its namesake brand and B&O Play for consumer sound systems according to the terms of the deal.

Topics: harman, bang olufsen

If you liked the article, share on:

Comments

Recommended

Not a few agree that the Volkswagen Polo news a styling overhaul. While this supermini still looks good as it is now, the latest facelift was around three years. With...
by - April 27, 2017
They say that when the going gets tough, the tough get going. That’s what Harvey Payne did with his Chevrolet Bolt. Ever since he bought it, it had been experiencing...
by - April 27, 2017
What defines a coupe? Well, according to the dictionary, “it is a car with a fixed roof and two doors”. Ok, now that it is clear, when does one not...
by - April 27, 2017
Back in 2013 was when the first hot hatch was released, that was the original A45 by Mercedes-AMG, carrying a hand-built 2.0 liter M133 turbo mill. It was then then...
by - April 27, 2017
BMW dealers have a problem, a good problem. The demand for the 2017 BMW 5 Series is very high, they cannot attend to all the customers. But actually, supplies are...
by - April 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries