HP Purchases Samsung’s Printer Business for $1.05 Billion

HP Inc. has big plans to disrupt the $55 billion copier industry. The personal computer and printing giant announced yesterday its move to buy Samsung’s printing business for $1.05 billion.

The print acquisition, which is being touted as the largest in HP’s history, positions the Palo Alto-based company to reinvent what has long been regarded as a dormant sector. Over the years, Samsung has built a portfolio of A3 superior multifunction printers (MFPs) that deliver the performance of copiers with the “power, simplicity, reliability and ease-of-use” of printers with fewer replaceable parts.

From the deal, HP also inherits Samsung’s intellectual property portfolio of more than 6,500 printing patents and 6,000 employees. Of those employees, approximately 1,300 are researchers and engineers with advanced expertise in laser printer technology, imaging electronics and printer supplies and accessories.

Just last week, the Seoul Economic Daily reported that Samsung was considering selling its printer business so that the Korean electronics giant could shift focus to its core businesses (i.e., smartphones, televisions and memory chips). By purchasing Samsung, HP not only eliminates one of its printer rivals, it stands to gain a potential boost in revenue to offset declines felt in the shrinking printer market.

As Fortune pointed out, recent numbers have been rather telling. According to International Data Corporation’s May report, worldwide shipments of printers declined 10.6 percent year-over-year to 23,114,918 devices shipped in the first quarter of 2016. HP had the best showing in Q1 2016 with 36 percent market share and 8,385,014 machines shipped. Still, that is an 18.6 percent drop from the previous year during the same time period, IDC noted. In terms of shipments, Canon placed second with 4,517,713, followed by Epson (4,000,229), Brother (1,777,332) and Samsung (1,015,240).

In 2015, HP split off its operations focused on selling business technology products, creating Hewlett Packard Enterprise Co; HP retained its personal computer and printer operations. “When we became a separate company just 10 months ago, it enabled us to become nimble and focus on accelerating growth and reinventing industries,” Dion Weisler, president and CEO of HP, said in a press release. “We are doing this with 3-D 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.”

The deal is expected to close within a year.