Samsung Electronics is to buy Harman International Industries for about $8 billion.
The deal marks a major push into auto electronics by the South Korean firm as well as the country's biggest overseas acquisition.
The electronics giant had previously shunned big acquisitions.
Today's deal underscores a strategic shift as the company tries to break into the high-barrier automotive industry where it has little track record.
The purchase of the US-based maker of connected car and audio systems is part of Samsung's effort to find new areas of growth as its mainstay smartphone business - scarred by the disastrous withdrawal of the fire-prone Galaxy Note 7 - slows.
Car makers already include or are developing technologies to enhance safety and provide better smartphone connectivity and entertainment systems.
This creates an opening for tech companies to break into a market for software, services and components.
Samsung agreed to buy Harman for $112.00 per share in cash, a 28% premium to the US firm's Friday close.
Harman's products, which provide infotainment, telematics, connected safety and security services, are used in more than 30 million vehicles made by car makers such as BMW, Toyota and Volkswagen.
Harman, the maker of JBL audio system, gets about two-thirds of its revenue from the automotive sector.
Its automotive order backlog stood at $24 billion at the end of June, more than three times annual sales of $6.9 billion in fiscal 2016 ended June 30.
Samsung created an automotive electronics business team a year ago to identify growth opportunities. It invested $450 million in Chinese car maker and rechargeable battery maker BYD Co this year.
Separately, Samsung has held talks with Fiat Chrysler Automobiles over a potential sale or partnership for the latter's Magneti Marelli auto parts maker, sources have said. The current status of those talks is unclear.
Samsung will not get into the business of making cars, President Young Sohn said on a call with analysts.
The Harman acquisition, which is subject to regulatory approvals, is expected to close in mid-2017.
