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Fujifilm, Xerox throw each other a US$6.1 billion lifeline
We'll buy the J/V from you so you can use the cash to buy us, goddit?
Fujifilm has announced a $US6.1 billion deal to take control of troubled Xerox.
It's a complex deal: the Fuji Xerox joint venture (75 per cent owned by Fujifilm) will spend $US6.1 billion buying Fujifilm's stake in the J/V, and Fujifilm will use those billions to buy a 50.1 per cent stake in Xerox.
The combined company will have revenue of $18 billion, and the companies believe they'll be able to trim costs by around $1.7bn by 2022.
Reuters reported that Fujifilm has already announced layoffs of around 10,000 among its Asia-Pacific staff.
The two companies are suffering in a printer photocopier market that's suffered thanks to the getting-closer-every-year paperless office. Announcing the deal, Fujifilm said the new entity will “transform itself into a lean company” which will "become a world-leading document solution company".
Last week, activist investors Carl Icahn and Darwin Deacon demanded changes at the top of Xerox and the dissolution of the 50-year-old Fuji Xerox joint venture as a response to an accounting scandal in 2017. This may not be quite the change they wanted!
Two winners from the deal are Shigetaka Komori, current chair of Fuji Xerox and Fujifilm and also COO of Fujifilm, who will chair the board of the new company; and Xerox CEO Jeff Jacobson, who will be CEO of the new company.
Xerox shareholders will get a $2.5bn sweetener with the deal, in the form of a special cash dividend.
Xerox subsidiary Parc – once the Xerox Palo Alto Research Center, famous inventor of most of modern computing – doesn't get a mention in the Fujifilm/Xerox announcement. Perhaps that's a good thing. ®