Japanese multinational photography company, Fujifilm, will acquire Xerox Corp in a $6.1 billion deal. As part of the purchase, Fujifilm will incorporate the US company into their existing joint venture in an attempt to offset lackluster printing revenue.
Xerox Corp had been scouting the market for a potential buyer as it struggled to reinvent itself in an industry where office printing has little room to grow. Fujifilm’s acquisition is also an attempt for them to expand and streamline its copier business focusing this time around on document solution services.
According to the two companies, the new Fuji Xerox joint venture would deliver an estimated $1.7 billion in total cost savings by 2022.
The deal offers Fujifilm a 75 percent stake in Fuji Xerox, a joint venture that has been active for more than fifty years. Fuji Xerox offers a wide range of photocopying products and services in the Asia-Pacific region.
Fujifilm and Xerox Corp said that Fuji Xerox will buy back Fujifilm’s stake for around $6.1 billion, a purchase which will be supported by bank debt. The money will be used to purchase 50.1 percent of new Xerox shares.
The companies announced the deal this Wednesday and the final steps of the acquisition will be completed around July-August.
The joint venture will still retain the Fuji Xerox name and become a subsidiary of Fujifilm. Its dual headquarters will be located in the United States and Japan, with a physical location listed in New York. Fuji Xerox will be managed by Xerox CEO, Jeff Jacobson, and Fujifilm CEO, Shigetaka Komori will fill in the role of chairman. Fuji Xerox reportedly makes up for nearly half of Fujifilm’s sales and operating profit.
Restructuring efforts have led to Fujifilm announcing that it will be cutting 10 thousand jobs at Fuji Xerox, which is more than a fifth of its workforce in the Asia Pacific region.
Image Source: WikipediaCommons