Xerox to combine with Fuji Xerox

Joy Montgomery
February 1, 2018

Fuji Xerox will buy back the 75% proportion of the existing business already owned by Fujifilm, for around $6.1 billion with bank debt.

"New Fuji Xerox will benefit not only from its size but also from its solid management resources, including strong brands, state-of-the-art technologies and excellent human resources", Fujifilm said in a statement. While the impact in Upstate New York is now unknown, a company conference call is scheduled for Wednesday.

The Fuji takeover news comes as Xerox reported total 2017 revenues of $10.7 billion, 4.7% lower than 2016 but in line with company guidance. Xerox also announced a fourth-quarter loss, while Fujifilm announced its three-quarter earnings results.

Fujifilm hopes the new joint venture will offer "new value to customers" and will be able to strengthen its position in the document solutions space, office document product business, as well as commercial printing. Fujifilm will use those proceeds to purchase 50.1 percent of new Xerox shares.

FUJIFILM Holdings Corporation and Xerox Corporation on January 31 announced that they have entered into a definitive agreement to combine Xerox and their longstanding Fuji Xerox joint venture.

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Xerox shares were up 9.70% at the time of reporting, after closing at $32.68 on Tuesday.

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Sluggish performance at Xerox had prompted investors to call on the USA company, which had owned 25 percent of the joint venture, to explore strategic options.

Fuji Xerox, which makes printers and copiers mainly in Asia and Australia, has been hit by falling demand. Once the takeover is complete, holders of XRX stock will control 49.9% of the new company. Current Xerox CEO Jeff Jacobson will continue lead the company, while Fujifilm CEO Shigetaka Komori will serve as chairman.

The joint venture will cut 10,000 jobs in Asia as part of the restructuring as the Japanese company struggles with an "increasingly severe" market environment, Fujifilm said Wednesday.

For fiscal 2018, Xerox forecast reported earnings from continuing operations of USD2.30 to USD2.50 per share and adjusted earnings per share of USD3.50 to USD3.70.

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