Bang & Olufsen A/S plans to sell its automotive sound-system business to Harman International Industries Inc., the U.S. maker of JBL audio equipment, as the Danish company reorganizes to focus on consumer electronics.
Bang & Olufsen stock jumped the most in almost 25 years after Stamford, Connecticut-basedHarman said it will pay 145 million euros ($156 million) for the unit as well as technology license fees. Bang & Olufsen said separately that it will sell its minority stake in drug-dispensing equipment maker Medicom and is looking at options for its ICEpower amplifier unit.
Ole Andersen, the chairman of Struer-based Bang & Olufsen, told Danish newspaper Berlingske last December that the company is too small to stay independent and must either scale back business areas or seek partners.
“To further reduce complexity within Bang & Olufsen, and to ensure focus on the consumer business, the company has decided to further evaluate the future ownership of assets that are not considered core” to that strategy, the Danish manufacturer said in a statement.
Bang & Olufsen surged as much as 40 percent to 70 kroner, the steepest intraday increase since at least April 1990, and was trading up 35 percent as of 1:13 p.m. in Copenhagen. The stock has gained 87 percent this year.
Harman, which also makes AKG and Harman Kardon systems, will pay at least 12.7 million kroner ($1.82 million) a year for exclusive use of Bang & Olufsen and B&O Play stereo technology in vehicle sound systems over 20 years, the Danish company said. Harman said it will market the Bang & Olufsen products to makers of high-end cars and target B&O Play to the “mass luxury market.”
The deal provides Harman with carmaking customers including BMW AG, Volkswagen AG’s Audi division and Daimler AG’s Mercedes- Benz brand. Bang & Olufsen will retain its namesake brand and B&O Play for consumer sound systems.
Additional reporting by Allison Collins.