Xerox Scraps Accord on Acquisition by Fujifilm

May 14, 2018

New York- Xerox Corp. said Sunday it will terminate the agreement on the acquisition of the U.S. copier maker by Japan's Fujifilm Holdings Corp.

Xerox said it has entered into a new settlement agreement with two major shareholders who opposed the deal--Carl Icahn and Darwin Deason.

The agreement resolves the pending proxy contest ahead of Xerox's annual meeting of shareholders and Deason's litigation against Xerox and its directors, according to the company.

But Xerox said the agreement will not affect the claims filed by Deason or other Xerox shareholders against Fujifilm.

"We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm," Icahn, a prominent investor, said in a statement.

As a reason for scrapping the takeover accord, Xerox cited the failure by Fujifilm to deliver the audited financials of subsidiary Fuji Xerox Co. by the due date on April 15.

At the same time, the U.S. firm said it took into account "other circumstances limiting the ability of the company, Fujifilm and Fuji Xerox to consummate a transaction," suggesting that its decision was affected by opposition from the major shareholders.

Fujifilm was planning to combine Xerox with Fuji Xerox and acquire a majority stake in Xerox.

Jeff Jacobson resigned as chief executive officer of Xerox and as a member of the company's board. Five other directors also resigned from the board.

New board members recommended by Icahn and others will decide Xerox's management policies, possibly including an alternative buyer of the company.

U.S. investment firm Apollo Global Management LLC has reportedly expressed interest in acquiring Xerox.

On May 1, Xerox decided to settle its dispute with the major shareholders over the acquisition bid by Fujifilm. But the two sides remained at odds on the terms of their settlement and failed to reach an agreement.

Xerox later appealed a court ruling suspending the process of acquisition by Fujifilm, reversing its policy repeatedly in a short period of time. Jiji Press