HP Inc. plans to acquire Samsung Electronics' printing business for $1.05 billion.
HP claims the deal positions it to "disrupt and reinvent the $55 billion copier industry" by replacing copiers with multifunction printer (MFP) technology.
Calling it the largest print acquisition in its history, HP said the addition of Samsung's printing business will accelerate growth, strengthens the laser printing portfolio that its established with Canon, and paves the way for printing innovation. It also creates new avenues for growth and profitability for partners by shifting managed print services from transactional to contractual, HP noted in a statement.
HP's Post-Split Strategic Shift
Ten months ago, the former Hewlett-Packard Co. split into two entities: Hewlett Packard Enterprise (HPE), which houses the former HP corporate hardware, data center products and services division, and HP Inc., which sells personal computer and printers.
Last week, HPE realigned its portfolio and product roadmap through an $8.8 billion deal with Micro Focus, a software company based in Newbury, England.
In today's deal, HP gains an intellectual property portfolio of more than 6,500 printing patents and a 6,000 member workforce that includes nearly 1,300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics and printer supplies and accessories.
Samsung, based in Suwon, South Korean, will spin off its Printing Business Unit into a separate company Nov. 1, pending shareholder approval. Samsung plans to sell 100 percent of the newly created company and overseas assets related to the business to HP, Samsung officials said.
Tough Times for Samsung
Samsung, which is also a leading manufacturer of mobile phones, is reeling from reports of Galaxy Note 7 explosions related to defective batteries. The recall is expected to cost the company around $1 billion.
The argument could be made that Samsung is selling one business unit to make up losses in another. But Samsung officials did not relate the sale to HP with the revenue loss from its phones.
They called the HP deal "in line with the company’s efforts to concentrate on its core business areas." Samsung will source printers from HP and continue to market in Korea under the Samsung brand. Samsung produces the printers in China and has more than 50 sales offices globally.
What HP Gains
HP already has a laser printing portfolio with Canon. Samsung's portfolio includes multi-function printers. The acquisition allows HP to integrate the Samsung printer business’ products, including its mobile and cloud user experience, with HP’s PageWide technologies.
Dion Weisler, president and CEO of HP, said the company's split from its former parent enabled it to "become nimble and focus on accelerating growth and reinventing industries."
"We are doing this with 3D printing and the disruption of the $12 trillion traditional manufacturing industry, and now we are going after the $55 billion copier space," Weisler said in a statement.
Oh-Hyun Kwon, vice chairman and CEO of Samsung Electronics, called HP "a valued partner and customer," adding, “We can now leverage our combined capacity for innovation to further enhance the value of our relationship."
After closing, Samsung has agreed to make a $100 million to $300 million equity investment in HP through open market purchases.