Hewlett Packard on Monday has said it will acquire Samsung Electronics’ printer business in a deal valued at $1.05 billion; a move that will allow the US-based company further consolidate its position in the $55 billion A3 copier industry.
The acquisition will bring an intellectual property portfolio of more than 6,500 printing patents and a workforce of about 6,000 employees globally, including nearly 1,300 researchers and engineers.
Samsung has its key engineering centre in South Korea with operations in the US, India, China, Japan, Russia, Canada, Brazil and other countries.
HP gets a significant chunk of its profit from supplying ink and toner for the printers it sells. However, HP’s printing division revenue fell 14 percent in the latest quarter, while overall sales were down about 4 percent to $11.9 billion.
In India, HP is estimated to have close to 2,000 employees in the printer division, including R&D in Bengaluru.
The acquisition of Samsung’s printer business is expected to be accretive in the first full year following closing, with cost synergies and a strong financial model.
Statement from HP
The transaction is expected to close within 12 months pending regulatory review and other customary closing conditions. After closing, Samsung has agreed to make a $100-300 million equity investment in HP through open market purchases
HP said the integration costs are estimated to be in the range of $150-200 million over a three-year period.
The acquisition of Samsung’s printer business ideally offers HP the ammunition to deliver printing solutions with state-of-art technology.
The deal will also strengthen HP’s ability to service customers in global laser printing, a category where it has enjoyed a strong, mutually beneficial partnership with Canon, HP said.
Canon is HP’s supplier of printing engines in its existing product line.