In the midst of Samsung’s Note 7 debacle, the company announced its intention to sell its printer division to HP Inc for $1.05 billion.
The sale was reportedly approved by the company’s board of directors on September 12th, as part of an effort to concentrate on its core business areas. Samsung claims that its printer division employs approximately 6,000 people with production facilities in China and 50 sales offices around the world. The division reportedly generated $1.8 billion (2 trillion Korean won) in revenue in 2015.
HP has entered to acquire a 100 percent stake in the company, effective November 1st. The agreement states that Samsung will source printers from HP and continue to market in Korea under the Samsung brand.
Through this purchase, HP will gain 6,500 printing patents and 1,300 of the 6,000 employees, including researchers and engineers. HP claims it will attempt to replace “outdated” copiers with multifunction printers, including Samsung’s collection of A3 MFPs.
Furthermore, Samsung will make an equity investment in HP of between $100 and $300 million through open market purchases.
This past week has been a tumultuous one for Samsung as the company’s latest flagship, the Note 7, encountered claims of explosive batteries around the world. Since then, the company has begun a billion dollar recall which allows owners of the phone to have it replaced with new one.
The company’s shares have fallen to their lowest level in over two months since the reports of exploding batteries began making their way across the internet. The recall is an unprecedented one for Samsung, and almost directly collided with the launch of Apple’s iPhone 7 and iPhone 7 Plus last week.
HP on the other hand, split from its enterprise company HPE (Hewlett Packard Enterprises) ten months ago and already owned a 36 percent share in the 23 million units of hard copies peripherals sold this quarter. Samsung, the fourth largest vendor, only had a four percent share.
In general however, the demand for printing resources has decreased by over ten percent. The company reported in August that its overall revenues had decreased by 14.3 percent and its printer revenues by two percent.
The deal is expected to close within one year, pending shareholder approval.
Source: Samsung Electronics