HP to buy Samsung’s printing business for $1 bn

Samsung Electronics on Monday said it has agreed to sell its printer business unit to US personal-computer maker HP. While the deal size has not been divulged, industry watchers put the figure at $1.05 billion.

The transaction is part of its “efforts to concentrate on its core business areas”, Samsung said. Under an agreement, Samsung will source printers from HP and continue to market them in Korea under the Samsung brand, the company said in a statement.

“Samsung will spin off the printing business unit into a separate company as of November 1 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,” the statement said.

The transaction is expected to close within one year, subject to the appropriate regulatory approvals.

Samsung’s printing business, with 6,000 employees, a production base in China as well as more than 50 sales offices globally, posted 2 trillion Korean won in revenue in 2015, according to the statement, IANS reported.

The acquisition, which aims at reinventing and replacing service-intensive copiers with superior multi-function printing (MFP) technology, positions HP to disrupt the $55 billion copier industry — a segment that has not been innovated in decades.

“When we became a separate company just 10 months ago, it enabled us to become nimble and focus on accelerating growth and reinventing industries,” said Dion Weisler, president and CEO of HP.

“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,” he added.

Samsung has built a strong portfolio of A3 MFPs that deliver the performance of copiers with the power, simplicity, reliability and ease-of-use of printers and with as few as seven replaceable parts.

Integrating the Samsung printer business’ products, including their mobile-first and cloud-first user experience, with HP’s PageWide technologies is set to create a breakthrough portfolio of printing solutions with the industry’s best device, document and data security.

“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,” Weisler said.

The acquisition strengthens HP’s leading laser printing portfolio that has been established with Canon, and paves the way for future printing innovation.

Samsung’s printer business also brings an intellectual property portfolio of more than 6,500 printing patents and a workforce that includes nearly 1,300 researchers and engineers.

Acquiring Samsung’s printer business will also strengthen HP’s ability to service customers in global laser printing, a category where it has enjoyed a mutually beneficial partnership with Canon for more than three decades.

“HP and Canon have long discussed print innovation to create customer value in business printing and in the growing MPS market. This transaction will further evolve our collaboration and bring about growth for both of our companies,” said Fujio Mitarai, chairman and CEO of Canon Inc.

LF Printer market

Large format printer (LFP) shipments grew 3.9 percent year over year in the second quarter of 2016 (2Q16) while hardware revenue grew by more than 7 percent, said IDC.

TimGreene, research director, U.S. Large Format Printer Tracker, said recovery in technology categories like eco-solvent and toner-based printers have run counter to some of the market trends over the past few quarters to create a bit of a surprisingly strong Q2.

Shipments in the large format CAD/Technical printer market segment grew more than 7.5 percent in Q2 2016 compared to Q2 2015, and are up by over 4.5 percent for the first half of 2016. Shipment growth in North America and the Europe, Middle East and Africa (EMEA) more than offset lower sales in Asia/Pacific (excluding Japan) through the first half of the year.

The top five suppliers, in order, were HP, Canon (when combined with Oce), Seiko Epson, Roland DG, and Mimaki.

IDC said HP grew both its share of shipments and share of revenue in Q2 based on the continued strength in HP Latex, PageWide XL, and FB-series printers. Some of the growth in revenue share is attributable to the aggressive discounting that other vendors are engaging in as they compete against HP.

Canon maintained its number two position among large format printer manufacturers in Q 2016 with over 22 percent of total large format printer shipments when Canon’s aqueous, UV, and toner-based printer systems are combined.

Epson, the number three supplier of large format printers, lost some share in terms of shipments, but is seeing slightly higher share in revenue due to the changing mix of large format printers the company Is selling. Epson has re-launched some of its large format eco-solvent lineup early in 2016 and is starting to see these products drive more revenue.

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