Fujifilm nears deal with Xerox
- Author: Santos West Feb 01, 2018,
Feb 01, 2018, 0:20
"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. (XRX) is nearing a deal with Japan's Fujifilm Holdings Corp. The cash dividend represents a 30% to Xerox's unaffected share price of $30.35 on January 10 before the reports of a possible deal surfaced.
Fujifilm Holdings and copier company Xerox Corp. said Wednesday the Japanese company will take over Xerox in a restructuring meant to slash costs. Xerox had faced a revolt from two major shareholders, Carl Icahn and Darwin Deason, who between them control 15 percent of the company. In essence, Fuji Xerox becomes a tracking stock for Fujifilm shares in the same way that Sprint is a tracking stock for Softbank.
The Fujifilm Holdings group specializes in image technologies, medical and office equipment.
Fujifilm and Xerox declined to comment on the report.
The transaction has been unanimously approved by the boards of directors of both firms. As part of the deal, it will issue a combined $2.5 billion in cash dividends to its shareholders. "We are excited to strengthen our longstanding relationship with Fujifilm as we enter the next phase of Xerox's transformation journey". Fuji Xerox is even known as a rare success story for a cross-border joint venture.
Global leader with combined revenue of approximately $18 billion and almost $120 billion total addressable opportunity.
Fuji Xerox mainly has operated in Japan and the rest of Asia, with Xerox handling business in the USA and Europe. It says this will be due to the larger global reach of it and an improved financial profile.
The targeted cost savings represent approximately 10% of the total cost base of the new Fuji Xerox and will drive significant margin expansion over the next four years.
Formed in 1962 it was the longest running joint venture between USA and Japanese companies. These amounts are incremental to Xerox's ongoing Strategic Transformation initiatives. In this earnings report, the company saw earnings per share of $1.04 on revenue of $2.75 billion. Fujifilm on Wednesday reported a 29.4 percent drop in operating profit at its document solutions operations, which includes Fuji Xerox, for the third quarter, underperforming its imaging and information segments. "The new structure will use the qualities of our three organizations".
The new Fuji Xerox expects to maintain investment grade credit ratings at closing.
Xerox-the iconic American company that began in Rochester, New York in 1906-has been acquired by Fujifilm for $6.1 billion.
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Fuji Xerox is a document solutions company founded in 1962, now 75% of whose capital was invested by the Company and 25% by Xerox. Shigetaka Komori will serve as chairman of the board. The company's market cap is $8.32 billion.