HP to buy Samsung printer business for $1.05bn

HP Inc. is buying Samsung’s printing business for $1.05 billion. The acquisition will help Silicon Valley company expand into 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.

HP says it wants to use the purchase to "disrupt and reinvent" the $55 billion copier industry, which "hasn’t innovated in decades." "Copiers are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements," says HP.

Through the deal, HP will not only inherit 6,000 Samsung employees but would also get Samsung’s laser printing technology and around 6,500 printing technology patents. Samsung’s laser printing technology will be crucial for HP as it attempts to enter the copier machine market, which requires machines that can quickly print multiple copies.

HP will also acquire 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.

Enrique Lores, president in charge of HP’s imaging and printing business, said acquiring printer engine technology would both bolster its profit margins and help it shape the evolution of its laser printers. “You have control over the core technology,” he said. “That is very, very important.”

HP leads the shrinking printer market with 36 percent market share and 8,385,014 machines shipped in the first quarter, an 18.6 percent drop from the previous year during the same time period, according to International Data Corporation (IDC). Canon is the second-biggest printer company in regards to shipments, followed by Epson, Brother, and Samsung.

By acquiring Samsung, HP would eliminate one of its printer rivals and gain a possible boost in revenue to offset declines in its printing business.