Tuesday, 25 September, 2018

Xerox reaches deal ceding control to partner Fujifilm

REUTERS  Thomas White  Illustration  File REUTERS Thomas White Illustration File
Nellie Chapman | 31 January, 2018, 14:15

Xerox reported that ceding power to Fujifilm was unanimously approved by the Boards of Directors of both Fujifilm and Xerox.

The Journal reported Fujifilm and Xerox are close to a deal that would combine Xerox with the joint venture company it has with Fujifilm, and the US company's shareholders would own just under half of the resulting entity. Norwalk, Connecticut-based Xerox will own 49.9 of the combined company.

Japan's Fujifilm Holdings 4901.T said it is cutting 10,000 jobs globally at its joint venture with Xerox Corp XRX.N to cope with a decline in the photocopying business, amid speculation of a new deal between the two companies.

Fujifilm, which generates nearly 60 percent of sales from overseas, is pushing to offset waning demand at its printer and copier hardware business by shifting focus to managed-print services and medical imaging.

Xerox has been under pressure to find new growth sources as it struggles to reinvent its legacy business amid waning demand for office printing.

Fuji Xerox - a 55-year-old joint venture - manufactures printers and copiers mainly for offices in the Asian and Oceania regions.

Fujifilm shares were down 0.4 percent in early morning trade on Wednesday.

The companies said upon final approval of the deal, Jeff Jacobson, President & CEO of 112-year-old Xerox, is due to become CEO of New Fuji Xerox.

The combined company will keep the Fuji Xerox name and become a subsidiary of Fujifilm, with dual headquarters in the United States and Japan, and listed in NY. "An attractive, certain cash dividend, together with participation in the future success of the combined company, presents a compelling value equation for Xerox shareholders".

The takeover deal comes less than a year after Fujifilm admitted improper accounting standards at Fuji Xerox, but Komori said that Xerox's strong governance standards could be beneficial to the new company.

Fujifilm shares fell 8.3 percent on Wednesday ahead of its announcement of job cuts but after the Journal report about a deal with Xerox.