HP Inc. Buying Samsung’s Printer Business for $1.05 Billion

HP earnings

HP took over the running of Hewlett-Packard’s printing and PC businesses 10 months ago when Hewlett-Packard split into two companies: HP Inc., and Hewlett Packard Enterprise, which took over the old H-P’s data center, networking, server and high-end business computing. After closing, Samsung has agreed to make a $100 million to $300 million equity investment in HP through open market purchases.

HP is buying Samsung’s printer business for .05 billion in a move aimed at “disrupting” the dusty and stale printing industry. It’s also part of a bigger plan by the company to expand its portfolio beyond its well-known line of printers and find new sources of growth as smartphones, tablets and other digital devices reduce the need for traditional paper printing.

The acquisition of Samsungs printer business allows HP to deliver print innovation and create entirely new business opportunities with far better efficiency, security, and economics for customers, he added. HP is looking to be the company to introduce innovation into this market by integrating the Samsung printer business’ products, including their mobile-first and cloud-first user experience, with HP’s next-generation PageWide technologies.

Samsung’s printing unit, which employees about 6,000 workers and has a production base in China and more than 50 sales offices globally, posted 2 trillion won ($1.8 billion) in revenue in 2015.

HP said it will buy the unit for $1.05 billion and that the deal will boost growth opportunities in the copier segment, while Samsung made clear the transaction was “part of the company’s efforts to concentrate on its core business areas”.

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 deal will also strengthen HPs ability to service customers in global laser printing, a category where it has enjoyed a strong, mutually beneficial partnership with Canon, HP said.

The deal needs regulatory approval in order to come into effect, and the process is estimated to last about 12 months. Purchasing Samsung’s existing laser printers and patents will give it a head-start when developing new products. Milunovich has a neutral rating and $14-a-share price target on HP’s stock. HP relies on Canon Inc. for key laser technology in some of its printers.