American multinational information technology company, HP has announced a definitive agreement to acquire Samsung’s printer business in a deal valued at $1.05 billion which is expected to bolster HP’s offerings in the market for high-volume devices that handle printing and copying for office work groups.
The transaction, which is subject to regulatory approval, is expected to close within 12 months, the companies said on Monday. Samsung also agreed to buy between $100 million and $300 million in HP shares through open-market purchases after the business sale is completed.
“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. 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.” said Dion Weisler, president and CEO of HP.
According to the press release, Samsung’s printer business also brings a compelling intellectual property portfolio of more than 6,500 printing patents and a world-class workforce that includes nearly 1,300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics, and printer supplies and accessories to support continued innovation in print market solutions.
Through the deal, HP also acquired the ability to manufacture the crucial mechanisms inside laser printers, known as printing engines. Samsung developed the printing engines used in its own laser printers, while HP has always used external suppliers for these components.
“HP Inc. has been a valued partner and customer of Samsung,” said Dr. Oh-Hyun Kwon, vice chairman and CEO of Samsung Electronics Co., Ltd. “We can now leverage our combined capacity for innovation to further enhance the value of our relationship.”
HP last month reported that revenue from ink and toner supplies declined 18% in the third fiscal quarter from the year-earlier period, while printer hardware unit sales fell 10%. HP Chief Executive Dion Weisler has vowed to spur revenue growth by expanding in A3 printing markets, a business HP estimates has $55 billion in annual revenue and which it has tried to crack before with little success.
Several hours after disclosing the deal, HP unveiled 16 new multifunction printers targeted at so-called A3 larger printer-copier combinations that are the stronghold of such companies as Xerox Corp., Canon Inc., Ricoh Co. and Konica Minolta Inc.