Japan's Fujifilm to take over Xerox

REUTERS  Thomas White  Illustration

(TYO:4901) reached an agreement with paper company Xerox Corp.

Xerox Corp. reached a deal with Fujifilm Holdings Corp. that would cede control of the USA corporate giant to the Japanese company after pressure from activist investor Carl Icahn to shake up a venture operated by the two companies.

Under the definitive agreement, Xerox will cede a 50.1 percent stake in the US printer and copier giant to the Japanese document solutions powerhouse, the companies announced on Wednesday.

The company said it would book restructuring costs of 49 billion yen ($450.95 million) in the current fiscal year, lowering its operating profit forecast for the year to 130 billion yen from a previous 185 billion yen outlook. Fujifilm will utilize those returns to buy 50.1 percent of new Xerox shares.

The Journal reported Fujifilm and Xerox are close to a deal that would combine Xerox with the current joint venture company it has with Fujifilm, and that the US company's shareholders would own just under half of the resulting entity.

"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. Icahn, who owns more than 9 percent of the company, followed that by teaming up with Deason - Xerox's third-largest shareholder - and calling for Jeff Jacobson's removal as CEO.

Icahn supporter Jonathan Christodoro resigned from the Xerox board of directors, citing disagreement with other board members over Xerox's strategic direction. The cash dividend represents more than 30% of Xerox's unaffected share price of $30.35 based on closing share price as of January 10, 2018.

The tech giant expects to deliver annual cost savings of $1.7 billion by 2022 by creating a "lean" company - and this includes the loss of 10,000 jobs worldwide. Significant margin expansion is also expected over the next four years.

Reuters reports the Fujifilm will take a majority stake in the photocopying leader and merge the us company with their longtime Fuji Xerox joint venture in a move to save as much as $1.7 billion.

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