Hewlett-Packard Company (HPQ)  

Hewlett-Packard to buy Samsung

Dan weil picture
Dan Weil | FlashRatings | Monday, September 12, 2016 7:35 PM EDT
Hewlett-Packard has agreed to purchase Samsung Electronics printer business for $1.05 billion, as the iconic U.S. technology company seeks to boost its own sagging printer division.

The acquisition of Samsung will give Hewlett-Packard ( HPQ ) an opportunity to sell machines that offer heavy-duty printing and copying capabilities for sizable businesses. As part of the deal, Samsung will buy $100 million to $300 million HPQ shares on the open market.

Most of HP’s profit now comes from selling ink and toner for its printers, but that business is languishing, as people do less printing on their computers. The deal will provide HPQ with valuable laser-printing technology. HPQ says it will garner more than 6,500 patents from Samsung. 

There was no immediate reaction to the deal from Wall Street analysts Monday. But RBC Capital’s Amit Daryanani wrote in a commentary Friday, when rumors of a sale were circulating through Korean media, that a deal could be helpful for HP, Barron’s reports. 

Not only could the deal boost HP’s earnings, but also, “we think there is a strategic element to this deal as Hewlett-Packard currently licenses its laser print technology from Canon,” Daryanani wrote. “The acquisition for Samsung’s laser technology could reduce its reliance on Canon. In this scenario, Hewlett-Packard could see potential synergies increase beyond straightforward consolidation.”

A total of 15 analysts have issued ratings on Hewlett-Packard over the last 30 days, and six of them were positive. The median share price forecast from the 15 analysts was $14.50, which is 1.5 percent above the current level.