Biggest acquisition for HP Inc since split from Hewlett Packard Enterprise.
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The personal computer and printing giant said Monday that it will buy Samsung’s printing business for $1.05 billion. The companies estimate it will take one year to close, pending the usual regulatory scrutiny, and, upon doing so, Samsung will make a reciprocal investment of between $100 million and $300 million into HP’s business. On the other side of the buyout, HP Inc will gain key laser-printing technology and be in the position to focus more on different market segments.
Though Samsung is the world’s top maker of smartphones, televisions and memory chips, the company has lagged behind rivals such as HP, Canon Inc and Epson in the global printer market. It also creates new avenues for growth and greater profitability for partners as they expand managed print services as sales models shift from transactional to contractual.
It said the acquisition would give it a leg-up into the copier market, which HP said was worth US$55 billion despite not having “innovated in decades”. Integrating the Samsung printer business’ products with HP’s PageWide technologies will create a “breakthrough portfolio” of printing solutions, said HP, with the industry’s “best device, document and data security”, it claimed. According to technology research firm Gartner, in 2015 HP was the No.1 company in worldwide printer market share with $39.7 billion in revenue, but that was an 8.4 percent decline from the $43.3 billion in printer sales HP had in 2014.
“Samsung will spin off the printing business unit into a separate company as of November 1 upon the approval of shareholders, and sell a 100 percent stake of the newly created company and overseas assets related to the business to HP”, the statement said.
The deal will also strengthen HPs ability to service customers in global laser printing, a category where it has enjoyed a strong, mutually beneficial partnership with Canon, HP said.
Shares of HP closed last Friday at $14.07, down $0.56 or -3.83%.
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Samsung now employs 6,000 people worldwide in its printer business. This transaction will further evolve our collaboration and bring about growth for both of our companies. Samsung developed the printing engines used in its own laser printers, while HP has always used external suppliers for these components.
