Blockbuster deal: HP to buy Samsung’s printing business for $1 billion+

In one of the biggest deals to date in the printing industry, HP announced that it will buy Samsung’s printing business for $1.05 billion. HP will inherit 6,000 Samsung employees once the deal closes, which HP expects will be within 12 months, said HP President of Imaging and Printing Enrique Lores. Of those 6,000 employees, nearly 2,000 are research and development engineers, 1,000 are sales and support staff, and the rest work in service and manufacturing, Lores added. Samsung did not disclose how much revenue its printing business currently generates. With the acquisition, HP gets a big printing presence in Asia, as well as Samsung’s laser printing technology and about 6,500 printing technology patents. Samsung’s laser printing technology will be crucial for HP as it attempts to enter the copier market, which requires devices that can quickly print multiple copies, explained Tuan Tran, Global General Manager of Office Printing at HP. It’s also expected that Korea is going to be a very important site for HP’s printing business in the future.
Samsung was considering selling its printer business as the Korean electronics giant faces tough competition from rivals like Epson, Canon and HP. The move is also seen as part of a corporate overhaul by Samsung to better focus on its core smartphone, television and memory-chip businesses. Like many printer-focused companies, HP has seen weakening demand for its products as consumers and businesses continue to print less while shifting their attention to digital documents. A May 2016 report by the International Data Corporation (IDC) said that worldwide shipments of printers declined 10.6% year-over-year to 23,114,918 devices shipped in the first quarter of 2016.
HP leads this shrinking printer market with 36% market share and 8,385,014 machines shipped in the first quarter – an 18.6% drop from the previous year during the same time period, according to IDC. Canon is the second largest printer company in regards to shipments, followed by Epson, Brother and Samsung. By acquiring Samsung, HP would also eliminate one of its printer rivals and gain a possible boost in revenue to offset declines in its printing business. HP’s printing business, like its overall business, has declined in the past three quarters since HP formally split in November from Hewlett Packard Enterprise HPE, its newly-formed data-centre-focused division.
Finally, HP plans to debut a new line of copiers that Tran said are based on some of Samsung’s underlying printing capabilities – such as its laser and toner technologies. Although HP has a partnership with Canon that lets HP use some of Canon’s own laser technology in more conventional printers and not copy machines, Lores said the Samsung deal will not impact this existing relationship. A few weeks ago, HP shared its plans to acquire Samsung with Canon, which Canon was supportive of, said Lores. He added that if HP and HPE were still one giant company, acquiring Samsung’s printer business “would have been much more difficult to execute.” He added that the Samsung deal represents “proof that the separation is really working.”