HP Inc. to Buy Samsung’s Printing Business For Over a Billion Dollars

HP Inc. just got a lot bigger.

The personal computer and printing giant said Monday that it will buy Samsung’s printing business for $1.05 billion. HP will inherit 6,000 Samsung employees once the deal closes, which HP expects will be within 12 months, said HP president of imaging and printing Enrique Lores. Of those 6,000 employees, nearly 2,000 are research and development engineers, 1,000 are sales and support staff, and the rest work in service and manufacturing, Lores said.

With the acquisition, HP gets a big printing presence in Asia, as well as Samsung’s laser printing technology and around 6,500 printing technology patents. Samsung’s laser printing technology will be crucial for HP (HPQ) as it attempts to enter the copier machine market, which requires machines that can quickly print multiple copies, explained Tuan Tran, HP global general manager of office printing.

“Korea is going to be a very important site for the HP printing business going forward,” said Lores.

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Last week, the Seoul Economic Daily reported that Samsung was considering selling its printer business as the Korean electronics giant faces tough competition from rivals like Epson, Canon (CAJ), and yes,HP. The divestiture is part of a corporate overhaul by Samsung (SSNLF) to better focus on its core smartphone, television, and memory chip businesses.

In 2013, Samsung said that it would concentrate on selling its printers and printing services to businesses, which the company believed was a better strategy than targeting consumers. Samsung does not disclose how much revenue its printing business generates.

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Like many printer-focused companies, HP has seen weakening demand for its products as consumers and businesses continue to print less while shifting their attention to digital documents. A May report by International Data Corporation said that worldwide shipments of printers declined 10.6% year-over-year to 23,114,918 devices shipped in the first quarter of 2016.

HP leads the shrinking printer market with 36% market share and 8,385,014 machines shipped in the first quarter, an 18.6% drop from the previous year during the same time period, according to IDC. Canon is the second-biggest printer company in regards to shipments, followed by Epson, Brother, and Samsung.

By acquiring Samsung, HP would eliminate one of its printer rivals and gain a possible boost in revenue to offset declines in its printing business. HP’s printing business, like its overall business, has dropped the past three quarters since HP formally split in November from Hewlett Packard Enterprise (HPE), its data-center-focused sibling.

See also: Why Hewlett Packard Enterprise Is Slimming Down On Software

In HP’s most recent nine-month period ending on July 31, the company’s printing business dropped 16% year-over-year to $13.7 billion.

Also on Monday, HP plans to debut a new line of copier machines that Tran said are based on some of Samsung’s underlying printing capabilities, like its laser and toner technologies. Although HP has a partnership with Canon that lets HP use some of Canon’s own laser technology in more conventional printers and not copy machines, Lores said the Samsung deal will not impact the relationship.

A few weeks ago, HP shared its plans to acquire Samsung with Canon, which Canon was supportive of, said Lores.

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While HP bulks up on a big acquisition, sibling company HPE continues to shrink by selling off parts of its business as it narrows its focus to its core data center hardware business. HPE said last week that it would spin off its stalling software business to U.K. software company Micro Focus in a deal worth roughly $8.8 billion.

Lores said that if HP and HPE were still one giant company, acquiring Samsung’s printer business “would have been much more difficult to execute.” He said that the Samsung deal represents “proof point that the separation is really working.”

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