China imposes restrictions on HP’s Samsung buy

October 6, 2017

China has approved HP’s purchase of Samsung’s printer business but have imposed certain restrictions out of concern for the company’s dominance.

Deal Street Asia has reported that China yesterday approved HP’s $1.1 billion (€0.94 billion) purchase of the Samsung Electronics printer business, while adding certain curbs, “citing concerns about the U.S. firm’s dominance of the domestic laser printer market.”

HP revealed news of the purchase in September last year, saying it hoped to close the transaction within 12 months “pending regulatory review”. The deal is part of HP’s strategy to “disrupt the $55 billion (€46.9 billion) copier market by focusing on multifunction printers and more deeply embedding mobile and cloud printing technologies to its product solutions.”

China’s Ministry of Commerce released a statement yesterday, saying that the “sale of A4 format laser printers by HP in China should be done on “fair and reasonable” terms and the firm must report every six months on their prices and related data to the ministry”. They also stated that HP “must not buy any stakes in other A4 printer manufacturers in China even if they are a minority equity investment”.

In addition the ministry warned that HP “must not adapt its printers to restrict compatibility with third-parties or claim in advertising that its printers are not compatible with other supplies”.

As part of this deal, which a spokeswoman from the US firm said they hope to close in the fourth quarter, HP “would add an intellectual property portfolio of more than 6,500 printing patents and nearly 1,300 researchers and engineers with expertise in laser printer technology, imaging electronics and printer supplies.”

When contacted by Deal Street Asia regarding the deal, Samsung declined to comment.