China clears HP’s purchase of Samsung’s printer business

China’s Ministry of Commerce on Thursday conditionally approved HP’s acquisition of Samsung’s printing assets.

US computer giant HP struck a deal to take over Samsung’s 1 billion US dollar printer business in September 2016.

China’s conditional approval represents the country's latest antitrust clearance, following the approvals from the European Commission (EC) and the Competition Commission of India.

HP is currently waiting for regulatory approval by the US Department of Justice, the Korea Fair Trade Commission (KFTC) and other antitrust authorities.

Once it clears all antitrust hurdles, it will buy a big printing presence in Asia, as well as Samsung’s laser printing technology and patents.

So far, China’s Ministry of Commerce (MOFCOM), which reviewed the transaction under China’s 2007 Anti-Monopoly Law, is the only regulator to have cleared the transaction, even though it's on a conditional basis.

The two companies notified MOFCOM of the transaction on November 16, 2016.

In January 2017, following a preliminary review, MOFCOM initiated a second review phase, which was extended with the consent of both parties in April 2017.

The case was withdrawn before the extended phase expires, and refiled with the MOFCOM by the two companies in June 2017.

MOFCOM identified several reasons for concern regarding the impact of the transaction on the country’s A4 laser printer market. HP has a 45-50 percent market share in China while Samsung has 5-10 percent, meaning the two combined will dominate the market in China, and the dominant position will give HP the incentives to bundle printer and printing consumables together in one package at a bargain price, which would exclude or restrict competition in the market.

In light of these concerns, and following consultations with HP, MOFCOM approved the transaction with six conditions, including a decision requiring HP not to acquire any other laser printer manufacturer in China, or to sell printing products in bundles.

The HP-Samsung deal was announced only days after HP’s sister company sold its software business to UK tech company Micro Focus.

Hewlett-Packard split into two businesses in 2015: HP Inc., which focuses on printers and computers, and Hewlett Packard Enterprise, which focuses on data storage.

Samsung's printer business made 1.4 billion dollars in revenue in 2015 and includes more than 6,500 printing patents.

(CGTN)