Xerox cedes control to Fujifilm

This article first appeared in The Edge Financial Daily, on February 9, 2018.
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TOKYO: Xerox Corp, a once-iconic American innovator that became synonymous with office copy machines, is ceding control to Japan’s Fujifilm Holdings Corp, in a deal that creates an US$18 billion (RM70.56 billion) company and marks the end of the independence of the corporate giant.

Xerox, which has a market value of US$8.3 billion, will first merge with a joint venture (JV) the company operates with Fujifilm in Asia, according to a statement on Wednesday. Current Xerox shareholders will receive a cash dividend of US$9.80 per share. Tokyo-based Fujifilm will ultimately end up owning 50.1% of the combined entity, which expands the JV to encompass all of Xerox’s operations.

Activist investor Carl Icahn had pushed Xerox to explore “strategic options”, including shaking up its JV with Fujifilm, and electing four new directors. Icahn, along with investor Darwin Deason, also called for Xerox to replace chief executive officer (CEO) Jeff Jacobson. He will become CEO of the new combined company.

The deal will make for a more global company, according to Simon Chan, an analyst at Bloomberg Intelligence. “In the past, Fuji Xerox only operated in the Asia-Pacific region, and Xerox targets the Americas and Europe,” Chan said. “With the combined company, they can share cost on research, product development and potentially manufacturing capacity as well.” — Bloomberg