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Fujifilm buys Xerox in US $6.1 billion deal

Friday, 02 February 2018
By Print 21 Online Article
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Fuji Xerox HQ in Japan.

Japan’s Fujifilm Holdings is to take over Xerox Corp in a $US6.1 billion ($A7.6 billion) deal that will combine the iconic US-based company with existing joint venture Fuji Xerox to become “a new Fuji Xerox.”  

Fujifilm says it will cut 10,000 jobs at Fuji Xerox in the Asia Pacific region by March 2020. No further details about where and when the job cuts will take place have been announced.

The deal creates an $18 billion company and follows pressure from billionaire investor Carl Icahn – Xerox’s biggest shareholder – who demanded that Xerox remove its “old guard,” including CEO Jeff Jacobson, as the company faced declining demand for office printing.

“The new structure will leverage the strengths of our three companies’: Fujifilm CEO Shigetaka Komori.

Jacobson will become CEO of the new Fuji Xerox while Fujifilm CEO Shigetaka Komori will be chairman.

Fujifilm currently owns 75% of Fuji Xerox, a joint venture launched more than 50 years ago, which sells printing and photocopying products in the Asia-Pacific region, including Australia and New Zealand.

Under the deal, Fuji Xerox will buy back that stake from Fujifilm for around $6.1 billion and Fujifilm will use those proceeds to buy 50.1 percent of new Xerox shares. The deal is expected to be completed around July-August, 2018.

“This has been a speedy decision but I believe it’s a creative one,” said Fujifilm CEO Komori. “The new structure will leverage the strengths of our three companies.”

Xerox CEO Jacobson said the combined company would benefit from higher revenues and cost synergies. Xerox shareholders will receive a $2.5 billion special cash dividend resulting from the agreement.

“This transaction offers substantial upside for shareholders of the combined companies, including current shareholders of Xerox and Fujifilm Holdings, who will own shares in a more competitive company that has enhanced opportunities for long-term growth and margin expansion,” Jacobson said.

In a statement to investors, Fujifilm said ‘New Fuji Xerox’ would become the largest document solutions company in the world.

Fuji Xerox is a document solutions company founded in 1962, currently 75% of whose capital was invested by the Company and 25% by Xerox. Through a joint venture based partnership spanning 56 years, the Company and Xerox have deepened their multi-faceted mutual cooperation on technology, etc. and built a strong relationship of trust. Fuji Xerox is even known as a rare success story for a cross-border joint venture.

The Combination of the two companies is the optimal conclusion for both the Company has been determined by considering various options to increase corporate value, and it is expected that this combination will generate a large number of synergies. Fuji Xerox is mainly engaged in business in Japan and the Asia Pacific region, while Xerox is mainly engaged in business in U.S. and Europe. The two companies have provided solutions that solve management and business challenges, revolutionizing offices with xerographic technology and supporting the communication activities and value creation of customers through a variety of products and services.

Now, the Company will make Xerox an owned subsidiary after Xerox makes Fuji Xerox a wholly-owned subsidiary, and Xerox will be renamed “Fuji Xerox” (in this announcement, “New Fuji Xerox”). The Company will hold 50.1% of the shares of New Fuji Xerox, and New Fuji Xerox will maintain its listing on the NYSE. Also, it is planned that the current brands of both Fuji Xerox and Xerox will continue to be used after the Combination of the two companies.

New Fuji Xerox will become the largest document solutions company in the world in revenue size, and by deploying its operations worldwide with a uniform management strategy, New Fuji Xerox will realize further acceleration of business growth and new value creation for customers. In addition to its size, New Fuji Xerox will also have management resources such as high-value brands and the cutting-edge technology and excellent human resources that support those brands, as well as global marketing power and a superior customer base.

The full statement is available here.

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