Fujifilm to buy Xerox to create office equipment giant

February 1, 2018

Tokyo- Japan's Fujifilm Holdings Corp. said Wednesday it will acquire US printer and copier maker Xerox Corp. to become a global leader in office equipment.

Under an agreement between the two companies, Xerox will be merged with Fuji Xerox Co., a Fujifilm subsidiary partly held by the US firm, by the end of September. Fujifilm will acquire a 50.1 percent share in the merged company for 671 billion yen.

The deal will create one of the world's largest office equipment manufacturers, with annual sales of 3.3 trillion yen.

Fujifilm aims to expand its earnings by acquiring the sales networks of Xerox, amid a tough environment for copier makers.

"Expanding sales to the whole of the world will be the largest benefit" from the acquisition, Fujifilm chairman Shigetaka Komori told a press conference.

Fuji Xerox will streamline its operations, mainly overseas. Some 10,000 jobs will be shed in and outside Japan.

Komori will become chairman of the new company. A majority of its board members will be sent from Fujifilm, while Xerox Chief Executive Officer Jeff Jacobson will remain in the post.

Through the deal, Fujifilm plans to deliver $1.7 billion in annual cost savings by fiscal 2022.

Fujifilm needs to win understanding for the deal from Xerox shareholders. Some holders, including investment funds, have voiced concerns about the acquisition of the prestigious company, founded in 1906, by a Japanese firm.

Xerox shareholders will "naturally" accept the deal, Komori said, expressing confidence that the deal will boost the corporate value and stock price of Xerox.

Xerox will remain listed on the New York Stock Exchange as Fuji Xerox after the merger. The US company plans to pay special dividends totaling $2.5 billion to existing stockholders ahead of the completion of the deal.

Last year, inappropriate accounting practices were found at overseas sales units of Fuji Xerox.

Following the scandal, Komori assumed the post of chairman at Fuji Xerox, taking a stronger grip on its management. This may have been a factor that led to the integration and acquisition deal.

Fuji Xerox was established by the Xerox group and the precursor of Fujifilm in 1962. Jiji Press