Fujifilm Holdings is taking over Xerox in a $6.1 billion USD deal combing the two companies as demand for printers wanes. While there will likely always be some sort of demand for printing, more businesses and users have cut back. In part that’s due to more awareness of the benefits of reducing paper use and the prevalence of electronic document storage. According to Reuters, Xerox has been feeling the pressure as it has been trying to reinvigorate its legacy business with little success.
Fujifilm is in the same situation though, and this deal is an attempt to combine resources. Fujifilm now owns 75% of the combined company and they hope to save money which would amount to $1.7 billion USD by 2022. The combined company will keep the Fuji Xerox name and be a subsidiary of Fujifilm headquartered in both the United States and Japan.
“This has been a speedy decision, but I believe it’s a creative one,” Fujifilm CEO Komori told reporters at a briefing. “The new structure will leverage the strengths of our three companies.”
Xerox’s CEO said the combined company would gain an increased edge in new technologies, along with higher revenues and cost synergies, while Xerox shareholders would also benefit from a $2.5 billion special cash dividend resulting from the deal.
“This transaction… offers substantial upside for shareholders of the combined companies, including current shareholders of Xerox and Fujifilm Holdings, who will own shares in a more competitive company that has enhanced opportunities for long-term growth and margin expansion,” Jacobson said in a pre-recorded video message.
It will be interesting to see how Fuji Xerox tackles the new world of paperless transactions. They may have to narrow focus as the demand gets smaller but they should be able to get it together.