HP is buying Samsung’s printer business. The computer manufacturing giant made an announcement to this effect today, stating that it will bring disruption to a sector that has not seen the light of innovation since decades. The deal has been estimated at around $1 Billion and may take around 1 year to close.
As per the terms of the deal, Samsung’s Printing Business Unit will be spun out as an independent unit. After this, HP will be picking up full 100 percent ownership in the business.
After the conclusion of the deal, HP will be responsible for almost 6,000 new employees. This number also includes over 1,300 R&D professionals. It will also receive around 50 sales offices across the world. The business generated around $1.8 billion in revenue last year, although it has been stagnating of late with no particular innovations or disruptions in the niche. HP, as a pioneer of personal computing, hopes to change that soon.
As per Dion Weisler, president and CEO of HP,
Copiers are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements. Customers are frequently frustrated with the number of visits needed to keep copier machines functioning.
Speaking on the topic, Dr. Oh-Hyun Kwon, vice chairman and CEO of Samsung Electronics Co. Ltd. said,
“HP Inc. has been a valued partner and customer of Samsung. We can now leverage our combined capacity for innovation to further enhance the value of our relationship.”
According to the estimates from the companies, the deal will take almost a year to conclude, owning to regulatory scrutiny and other legal formalities. Once its done though, Samsung will also be making a reciprocal investment of between $100 million and $300 million into HP’s business.
The acquisition will also strengthen HP’s ability to service its customers in global laser printing niche. The company isn’t actually present in the category, so to speak. However, it has an extremely strong and mutually beneficial partnership with Canon, that spans three decades. The acquisition will also benefit this partnership and may serve to further strengthen this relationship.
HP and Canon have long discussed print innovation to create customer value in business printing and in the growing MPS market. This transaction will further evolve our collaboration and bring about growth for both of our companies.