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Harman International Shareholders Approved $8 Billion Merger Deal With Samsung

By February 20, 2017 at 7:02 am
Samsung's reputation takes a hit.

Shareholders of American automotive electronics company Harman International Industries Inc. approved the firm's merger with Samsung Electronics Co. Friday.

During Friday's shareholders' meeting in Stamford, 67 percent of shareholders in the meeting voted in favor of the US$8 billion merger. Of Harman's total 69,883,605 common shares, 49,460,322 or 70.78 percent were represented by either by shareholders or through proxies.

Those who voted against the merger were 2,107,178 shares, while those abstained were 431,312 shares. 
Harman is a worldwide leader for car audio equipment and in-car entertainment systems. The US firm is also the second-biggest player in the global telematics market.

Samsung needs to get regulatory approval from antitrust agencies in the United States, South Korea, China and the European Union to complete the transaction.

Governments may block the deal especially when a merger and acquisition will result to a specific product dominating the market. This scenario is more likely to happen in China and the European Union where Harman's products are primarily sold.

Once Samsung receives approval from the government regulators, the company is expected to complete the merger process by the third quarter of this year.

The South Korean tech giant's acquisition of Harman has faced some challenges since the deal was announced in November last year. 

Harman shareholders class action lawsuit against the company's management last month, accusing them of selling the company short and failing to look for other buyers than Samsung.

The deal is the biggest buyout by a South Korean company and the Samsung's first key acquisition since Vice Chairman Lee Jae-yong, the company's heir apparent, joined the board last year.

Lee was arrested this week on charges of bribery in relation to the unprecedented corruption scandal involving President Park Geun-hye and her friend Choi Soon-sil.

Prosecutors accused Lee of giving or promising around 43 billion won worth of bribes to Choi in exchange for the government's support of a merger between two Samsung units in 2015. The merger is seen by industry observers as a move to strengthen Lee's control over the group. 

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