China Clears HP Acquisition of Samsung’s Printer Business

Posted Date 10/13/17

The Chinese Ministry of Commerce has greenlit HP’s purchase of the printer operations of Samsung on the condition that the company will not acquire any other A4 printer producers in China, even a minority stake. Also, the authority has banned HP from “adapting” its printers to reduce their compatibility with third-party supplies and from advertising such incompatibility.

Shares in HP added 1.6% on the news of the Chinese approval of the deal, which was sealed last year but has since collecting all necessary anti-monopoly approvals. Since the start of 2017, HP’s stock has added an impressive 38.6%, outperforming the printing industry, which has added 33.3% since January.

HP’s move to buy Samsung’s non-core printer business seeks to strengthen its own portfolio and cement its leading position in this market. Samsung has more than 6,500 printing patents and a 1,300-strong team of engineers and researchers.

The move is essential amid intensified competition from Epson and Canon, and as consumers increasingly move away from printers and into digital alternatives. The printer market is notoriously mature and demand there is not exactly in supergrowth mode, which requires drastic measures to be taken, even if they cost $1.1 billion, which is the price tag for the Samsung printing business.

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