Fujifilm announces Xerox merger

Fujifilm is to take control of Xerox in a deal to create a company worth $18 billion, the companies have said.

The deal will combine Xerox with a joint venture the company operates with Fujifilm. Xerox, which is currently valued at $8.3 billion, will see its shareholders receive a $2.5 billion special cash dividend, or approximately $9.80 per share, funded from the combined company’s balance sheet. Perhaps most importantly for the company’s operations, shareholders will own 49.9 per cent of the combined company at closing.

The companies said that the deal will see the ‘iconic’ American giant launch into new lines of business to seek global growth and cut costs.

“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,” Jeff Jacobson, chief executive officer of Xerox, said in the company’s joint statement. Jacobson will become CEO of the combined company.

However, the FT reports that ‘people briefed on the matter’ believe the deal is taking place in order to "revive the ailing American group and thwart an activist shareholder revolt". Those aggrieved Xerox shareholders, identified by the report as Carl Icahn and Darwin Deason, had demanded that the company ‘revise or terminate its existing joint venture with Fujifilm’. They were particularly damning of Xerox chief exec Jacobson, stating that “he is neither qualified nor capable of successfully running” the company. 

It was also announced Fujifilm will undertake a restructuring that will cut 10,000 jobs globally.

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