Technology

Xerox pulls out of 57-Year Old Venture: Sells to Fujifilm at $2.3 Billion

Fujifilm

Xerox Holdings have agreed on selling 25 percent of Fuji Xerox joint venture to its Japanese partner, breaking five-decade old venture after multiple attempts of merger failed to take any shape. Fujifilm Holding will be buying the stock for $2.3 billion and shall take over 100 percent ownership of the Fuji Xerox joint venture.

In a joint statement on Tuesday, both Xerox and Fujifilm confirmed about this deal. The Wall Street Journal reported on the deal before the trading closed in Tokyo Stock Exchange. Shares of Fujifilm took a jump of 6.7 percent which is their best gain since February 2018.

Xerox, a household name in the copying industry, in February 2018 led out signals about its plan to severe its ally with Fujifilm. This joint venture of Xerox and Fujifilm was one of the oldest tie-ups between Japanese and American companies. This $2.3 billion deal will put a closure to a two years old saga which involved a complex merger plan, ouster of CEO, several lawsuits from both sides.

Shigetaka Komori, Fujifilm’s CEO, made a statement that full ownership of Xerox-Fujifilm will enable them to make faster decisions according to rapidly changing business environment.

Fujifilm also stated that this deal will have “mid to long term positive impact” on earnings after it gets full ownership of its subsidiary. 51 percent stock of Xerox International Partners, an original equipment supplier in the US and Europe, are also part of this deal.

The original merger plan was a complex one involving borrowing of money, which was right away opposed by Icahn and Deason, who had a 15% stake of Xerox at that time. This merger plan would result in reduction of Xerox’s original stock. Icahn got another win in May 2018 when his bid to oust former Xerox CEO came out winning.

Seeing the change in leadership of Xerox, Fujifilm decided that it will withdraw the lawsuit against Xerox if the original merger plan is cancelled. Fuji Xerox, which operated as a subsidiary of Fujifilm, will continue supplying Xerox after the transaction of current deal is completed, Fujifilm said in a statement.

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