HP spends over $1bn on Samsung print

HP has given Samsung more than a billion reasons to part with its printer business, as the graphics and computer giant announced its biggest print acquisition with the news that it has agreed to buy Samsung’s printer business in a deal worth $US1.05bn ($1.44bn).
 
Apart from the benefit of eliminating a competitor, HP says it intends to use the deal to disrupt and reinvent the US$55bn copier industry, describing copiers as outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements. It states that Samsung has built a formidable portfolio of A3 MFPs that deliver the performance of copiers with the power, simplicity, reliability and ease-of-use of printers and with as few as seven replaceable parts.
 
The company adds that integrating the Samsung printer business products, including its mobile-first and cloud-first user experience, with HP’s PageWide technologies will create a breakthrough portfolio of printing solutions with the industry’s best device, document, and data security. he deal will certainly challenge traditional rivals Ricoh and Xerox. Dion Weisler, president and chief executive of HP, says, “When we became a separate company just 10 months ago, it enabled us to become nimble and focus on accelerating growth and reinventing industries.
 
“We are doing this with 3D printing and the disruption of the US$12tn traditional manufacturing industry, and now we are going after the US$55bn copier space. The acquisition of Samsung’s printer business allows us to deliver print innovation and create entirely new business opportunities with far better efficiency, security, and economics for customers.”
 
This is the largest print acquisition in HP’s history and accelerates its growth opportunities in the copier segment, strengthens its leading laser printing portfolio that has been established with Canon, and paves the way for future printing innovation. 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.
 
Samsung’s printer business includes an intellectual property portfolio of more than 6,500 printing patents and a workforce that includes nearly 1300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics, and printer supplies and accessories.
 
Dr. Oh-Hyun Kwon, vice chairman and chief executive of Samsung Electronics, says, “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.”
 
In laser printing, HP has maintained a partnership with Canon for more than three decades. Both companies see the Samsung purchase as a positive for their partnership. Fujio Mitarai, chairman and chief executive of Canon, says, 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.”
 
Canon expects the acquisition to be accretive in the first full year following closing, with cost synergies and a strong financial model. It expects the transaction to close within 12 months pending regulatory review and other customary closing conditions. After closing, Samsung has agreed to make a US$100m to US$300m equity investment in HP through open market purchases.