The fiasco of the Note 7 venture blew up in Samsung’s face and harmed the South Korean firm’s assets so crucially that they had no choice but to restructure their business. Apparently, doing so involves selling their PC division to Lenovo.
A former business official of Samsung commented on the news:
“Considering the close business relationship between PCs and printers, it seems quite obvious that Samsung, after its PC business sell-off, is withdrawing from the PC market.”
The negotiations and settlements surrounding the sale have been underway for months as reported by international law firm Paul Hastings, representing Samsung. Lenovo is represented by Freshfields Bruckhaus Deringer.
Any deal, if settled, will cost around $850 million to $1 billion when it closes. Even as the world’s largest smartphone shipper, Samsung never really acquired a steady foothold in the PC market and had been making endeavors to stay afloat in the past year. Though this is not the first time Samsung has struggled with one of their divisions, they previously sold their printing business to the world’s largest printer maker HP for $1.05bn, another sector they seemed to be struggling with
Giving over their business to other established firms is not at all that surprising given strong competitors like HP, Lenovo and Dell and their hold on the market. Even with the PC market going downhill, Lenovo’s place as one of the top PC manufacturers remains certain, making it even more difficult for Samsung.
Samsung has decided to drop their European market shares and focus all of their attention and resources on the US market, a difficult task as there are major and prevalent names dominating the US PC market. It is safe to say that Samsung should stick to what they are actually good at and focus all their energy on the production of non-explosive smartphones.
The deal between the two firms isn’t official yet, but we will surely inform you once it is.