HP claims that this is the largest print acquisition in its history and it will accelerate its growth opportunities in the copier segment, strengthens its leading laser printing portfolio that has been established with Canon, and pave the way for future printing innovation. It is speculated to create new avenues for growth and greater profitability for partners as they expand managed print services as sales models shift from transactional to contractual.
Rationale
With this acquisition, Samsung printer business’ products, including their mobile-first and cloud-first user experience will be combined with HP’s next-gen PageWide technologies to create a portfolio of printing solutions with the industry’s best device, document, and data security.
The American technology company claims that copiers are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements. Customers are frequently frustrated with the number of visits needed to keep copier machines functioning. With this purchase, HP states to invest in the category by replacing copiers with superior multifunction printer (MFP) technology.
Dion Weisler, President and CEO, HP said, “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 $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.
What does Samsung have to say?
According to Samsung’s website, the company states that this agreement is a divestment of its printing business, as it has agreed to sell its entire global operations and assets of its printing business to HP. The transaction is part of the company’s efforts to concentrate on its core business areas. Samsung will spin off the Printing Business Unit into a separate company on the 1st of November this year upon the approval of shareholders, and sell a 100 percent stake of the newly created company and overseas assets related to the business to HP. Under the agreement, Samsung will also source printers from HP and continue to market in Korea under the Samsung brand. The transaction is expected to close within one year, subject to the appropriate regulatory approvals.
What does Samsung bring to the table?
The south Korean multinational conglomerate has built a portfolio of A3 MFPs that claim to deliver the performance of copiers with the power, simplicity, reliability and ease-of-use of printers and with as few as seven replaceable parts. It states that its printer business brings a compelling intellectual property portfolio of more than 6,500 printing patents and a 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.
Oh-Hyun Kwon, Vice Chairman and CEO, Samsung Electronics said, “HP 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.”
According to the American Tech company, acquiring Samsung’s printer business will also strengthen its ability to service customers in global laser printing, a category where it has enjoyed a strong, mutually beneficial partnership with Canon for more than 30 years. It is confident this transaction will provide new opportunities to further strengthen and accelerate this highly valued relationship and bring growth to both Canon and HP.
The transaction is expected to close within 12 months. Post completion, Samsung has agreed to make a $100 million to $300 million equity investment in HP through open market purchases.
