South Korea’s largest electronics giant Samsung Electronics Co. has agreed to sell its printing business to HP Inc. at $1.05 billion as part of its ongoing corporate restructuring efforts to focus on core businesses like smartphones and televisions.

Samsung Electronics said in a press statement that its board of directors on Monday approved the sale of the company’s Printing Business Unit to HP. The deal is valued at $1.05 billion, according to a separate press statement issued by HP on Monday. Under the agreement, Samsung will spin off its Printing Business Unit and sell a 100 percent stake in the separated entity to HP. HP that has a small number of sales staff in Korea to market its printers imported from overseas will inherit Samsung’s Printing Business Unit with about 1,300 researchers and development engineers, as well as Samsung’s intellectual property portfolio of more than 6,500 printing patents. Samsung printing division has about 6,000 employees in total, including workers at home and those working at overseas production sites in China and Brazil.

The divesture of the Printing Business Unit was decided as part of Samsung’s ongoing efforts to overhaul several low-performing businesses to focus on its core businesses. After it merged its digital imaging business under its mobile business in 2013, it is currently streamlining the camera business. Last year, it also downsized its light emitting diode (LED) business.

The sale also comes after Samsung’s printing solution sales remained lackluster relative to hefty investments it had made to boost its market presence in the global printing solution market. It launched new digital multifunctional devices and acquired Canadian cloud-printing firm PrinterOn in 2014. But it failed to add new global business customers in the B2B market, which is crucial for printing solution sales, leading it to finally withdraw its printing business out of the market. According to Samsung, its printing solution business posted 2 trillion won ($1.79 billion) in sales in 2015.

With the acquisition of Samsung’s printing business, HP is expected to bolster its printing solutions business not only in Korea but also in Asia. HP was split into two companies at the end of last year - one focusing on PC and printing businesses and the other for HP’s software, server, storage and networking services. In particular, it expects the buyout would help it further strengthen its laser printing business.

The deal is expected to be closed within 12 months, and after closing, Samsung has agreed to make a $100 million to $300 million equity investment in HP through open market purchases, according to HP in a press statement.

By Lee Seung-hoon

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