By Barry Eitel
SAN FRANCISCO (AA) – Xerox announced Wednesday that it would be acquired by the Japanese corporation Fujifilm in a $6.1 billion deal.
The boards of both companies announced that Fujifilm will become the majority stakeholder in Xerox.
The transaction will occur in a fairly convoluted matter because Fujifilm and Xerox have been partners in a joint venture, Fuji Xerox, since 1962. Fujifilm owns 75 percent of that company, which is mostly focused on producing printing products in Asia, while Xerox owns 25 percent.
The proposed plan is for Xerox to buy Fujifilm’s stake of Fuji Xerox for $6.1 billion, including debt. Fujifilm will use that money to then buy 50.1 percent of Xerox’s stock, forming a new company temporarily called “New Fuji Xerox”.
The companies said the plan would occur in July or August of this year.
“I am confident that Fujifilm’s ability to drive change as well as its experience of successful reinvention will give a competitive edge to the new Fuji Xerox, delivering significant value creation to shareholders of both the new Fuji Xerox and Fujifilm,” Fujifilm CEO Shigetaka Komori said in an announcement.
“We are delighted to welcome Xerox and its employees to the Fujifilm family and look forward to combining our strengths towards jointly shaping the future of our industry.”
Wednesday morning, Xerox and Fujifilm both shared quarterly earnings reports, and both companies are facing profit declines due to decreased printer and photocopier sales.
As part of the restructuring, Fujifilm said it was cutting 10,000 jobs, many in the Asia Pacific region.
Xerox’s shares hit their highest point in nearly three years Wednesday, closing up 4.34 percent at $34.13. Shares of Fujifilm plunged in Tokyo, dropping 8.32 percent to 4,190 yen (about $38.38) per share.
“The proposed combination has compelling industrial logic and will unlock significant growth and productivity opportunities for the combined company, while delivering substantial value to Xerox shareholders,” Xerox CEO Jeff Jacobson said in a statement.
“The new Fuji Xerox will be better positioned to compete in today’s environment with truly global scale, increased presence in fast-growing markets, and innovation capabilities to effectively meet our customers’ rapidly-evolving demands.”