Published on : Oct 06, 2017
China in a statement release on October 5 announced the approval of HP Inc’s acquisition of Samsung Electronics’ electronic business, but with certain restrictions. The acquisition is estimated at US$1.1 billion. The curbs made were announced by the Ministry of Commerce on the same day and is largely attributed to looming concerns of HP’s having a prominent position in domestic laser printer market. The multination information technology giant has announced the acquisition deal back in September, 2016 and is said to be motivated by the strategic shift to gain a foothold in the billion-dollar copier market in China. The company has been focusing on the sale of multifunction printers, with a concerted aim to embed mobile as well as cloud printing technologies to its offerings.
The deal is likely to be closed within a period of 12 months after regulatory approval is obtained.
Curbs to Facilitate Laser Printer Business in Fair and Reasonable Manner
According to the statement by the Ministry, the U.S.-based firm can sell A4 format laser printers in China in a reasonable and transparent manner. Furthermore, the Ministry should be informed about the prices every six months.
The firm cannot hold any stake in any manufacturer ofA4 printer in China, even if it’s of minority nature. In addition, HP should not in any manner restrict the compatibility of the printers with third parties or other suppliers in the country, as per the announcement.
The acquisition is expected to be closed by December 31 this year. According to terms of the deal, HP has agreed to add a portfolio of intellectual property consisting of over 6,500 printing patents. In addition, around 1,300 engineers and researchers with expertise in laser printer and imaging technology will be roped in by the firm as part of the deal. HP is ebullient that the acquisition will help it further the spirit of product innovation.