Samsung is officially selling its printer business to HP for a huge $1.05 billion.
Along with the whole printer business, HP will also get over 6500 printer-related patents, 1300 engineers and researchers. This acquisition will also help HP to disrupt $55 billion copier industry which has not seen any innovations in decades.
HP gets most of its profit from supplying ink and toner for its printers. It is already a market leader in the desktop printer business, but this business is growing for the company. Last month, HP reported that revenue from ink and toner supplies declined 18% in the third fiscal quarter. Printer hardware sales also fell 18%.
“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.”
Samsung is the fifth in the worldwide market for printers and copiers by shipments. It holds 4% market share. Like HP, Samsung also saw the decline of 8.9% in the second quarter compared with a year earlier.
This transaction is expected to close in next 12 months. Starting November 12, Samsing’s printer division will become a separate company and then it will be sold to HP. It employs 6000 people and recorded $1.8 billion in 2015.
After the closing of this deal, Samsung has also agreed to make a $100 million to $300 million equity investment in HP through open market purchases.
