Samsung (KRX:005930) to Sell Its Printer Business to HP (NYSE:HPQ) for $1.05 Billion

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Samsung (KRX: 005930) and HP (NYSE: HPQ) have agreed that the former will sell its printer business for $1.05 billion. The deal has been designed so that HP (NYSE: HPQ) is able to provide printing solutions to firms at a loftier relatively higher volume.

Latest Transaction Expected to Shut Inside 12 Months – Deal Likewise Involves Samsung (KRX: 005930) Buying Several 1000000 in HP (NYSE: HPQ) Shares

The transaction betwixt the ii companies is currently subjected for regulatory blessing, just is expected to conclude within a flow of 12 months. Samsung (KRX: 005930) has also agreed that information technology volition purchase between $100-$300 meg HP (NYSE: HPQ) shares through open-market purchases afterwards the business sale has successfully been completed. Just several hours had passed after the declaration, and HP (NYSE: HPQ) announced a family unit of xvi dissimilar multi-purpose printers.

HP (NYSE: HPQ) gets nearly of its profit from supplying ink and toner for its printers and currently leads the market place in desktop printer business, which was 46 percent, co-ordinate to the latest statistics provided past Statista. HP'due south biggest competitor in this particular market segment is Canon, which holds a 22 per centum marketplace share. Unfortunately, for the computer manufacturer, the printer business hasn't been growing, almost likely due to lesser requirements of actually owning a printer. Co-ordinate to stats, HP (NYSE: HPQ) final month reported that acquirement from ink and toner supplies declined eighteen percent in the third quarter year-over-year, while printer hardware unit sales barbarous 10 pct twelvemonth-over-year.

According to HP's Chief Executive Officer, Dion Weisler, the visitor intends to flow acquirement with a greater purpose through expansion of its A3 press markets, which is a business that HP (NYSE: HPQ) estimates brings in $55 billion in revenue annually. Now, it only then happens that Samsung (KRX: 005930) possesses a business that sells A3 machines, which will go to the manufacturer afterward business organization successfully concludes.

In addition, HP (NYSE: HPQ) also acquires the freedom to manufacture press engines, which is a core mechanism used in inside light amplification by stimulated emission of radiation printers. Samsung (KRX: 005930) develops its own printing engines used in its laser printers, while HP (NYSE: HPQ) always had to rely on external suppliers, which at this fourth dimension, the largest supplier is Canon. Hence, the conquering will salvage HP (NYSE: HPQ) tons of partnering costs, since the firm will exist able to produce this component in-business firm. By developing printing engines, HP (NYSE: HPQ) volition as well be able to extend its partnership to other companies looking to contain printing engines within their own machines.

HP (NYSE: HPQ) will also be able to expand its business equally the bargain also includes about 6,500 Samsung (KRX: 005930) printing-related patents. Approximately vi,000 Samsung (KRX: 005930) employees volition join HP (NYSE: HPQ), which according to Enrique Lores, who is the President of HP's imaging and printing business organisation, includes most 1,500 engineers.

Samsung (KRX: 005930) on the other hand has been slimming down its business organization portfolio under the leadership of Vice Chairman, Lee Jae-Yong. According to sources close to the affair, this direction is existence taken so that Samsung (KRX: 005930) can focus more on areas where the company is dominating. Samsung (KRX: 005930) currently ranks in fifth place in the world-wide market for printers and copies with a share of 4 pct. According to IDC, Samsung's shipments declined past 8.9 per centum for the second quarter yr-over-year, which most likely could have prompted the decision to take place from both parties.

What do y'all think of the decision fabricated past both companies? Tell usa your thoughts right away.

Source: https://wccftech.com/samsung-selling-printer-business-to-hp/

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