HP buys Samsung’s $1 billion printer business

United States of America’s computer giant HP has struck a deal to take over Samsung’s $1 billion (£750 million) printer business.HP said the acquisition would help it to “disrupt and reinvent” the $55 billion copier industry, a segment that “hasn’t innovated in decades”.

It is buying a big printing presence in Asia, as well as Samsung’s laser printing technology and patents.The deal comes days after HP’s sister company sold its software business to rising UK tech champion Micro Focus.

Hewlett-Packard split into two businesses last year: HP Inc, which focuses on printers and computers; and Hewlett Packard Enterprise, which sold its software business to focus on data storage.

“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, chief executive of HP Inc.

HP Inc said: “Copiers are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements.”It added that customers were frequently frustrated with broken copiers and the deal would help HP invest in better technology.

Samsung’s printer business made $1.4 billion in revenue last year and includes more than 6,500 printing patents as well as nearly 1,300 staff with expertise in laser printer technology.

Hours after disclosing the deal, HP unveiled 16 new multifunction printers targeted at A3 larger printer-copier combinations that are the stronghold of such companies as Xerox Corp., Canon Inc., Ricoh Co. and Konica Minolta Inc.

HP, created as part of the split of Hewlett-Packard Company, sells personal computers but gets most of its profit from supplying ink and toner for its printers. It is the market leader in the desktop printer business.

That business hasn’t been growing lately, in part because PC users print fewer pages these days. HP last month reported that revenue from ink and toner supplies declined 18 per cent in the third fiscal quarter from the year-earlier period, while printer hardware unit sales fell 10 per cent.

The Chief Executive of HP, Dion Weisler has vowed to spur revenue growth by expanding in A3 printing markets, a business HP estimates has $55 billion in yearly revenue and which it has tried to crack before with little success. Samsung already has a business selling A3 machines, which HP acquired in the deal.

HP also acquires through the deal, the ability to manufacture the crucial mechanisms inside laser printers, known as printing engines. Samsung developed the printing engines used in its own laser printers, while HP has always used external suppliers for these components.

President of HP’s Imaging and Printing business, Enrique Lores, said acquiring printer-engine technology would bolster its profit margins and help it shape the evolution of its laser printers. “What is important for us us that we will have control over the core technology,” he said.

Canon is HP’s main supplier of printing engines in its existing product line, a relationship, Lores said he expected to continue. HP’s new A3 laser printers rely on Samsung’s print engine.Beyond helping HP enter the market for A3 machines, he said, the deal would likely help winnow the number of suppliers in the market.

“We see HP as a consolidator in the market,” Lores said. “We want to drive this consolidation and make it happen.”