Xerox shares open higher amid news of Fujifilm takeover deal

Ashley Carr
February 1, 2018

XRX shares opened at $32.62 on Tuesday, and after hitting a high price of $32.84, finally ended the day at $32.68.

Xerox partners who spoke with CRN earlier this month believed the agreement, if reached, would tighten an already-longstanding relationship between the two companies.

Now, the Company will make Xerox an owned subsidiary after Xerox makes Fuji Xerox a wholly-owned subsidiary, and Xerox will be renamed "Fuji Xerox" (in this announcement, "New Fuji Xerox"). The cash dividend represents a 30% to Xerox's unaffected share price of $30.35 on January 10 before the reports of a possible deal surfaced. Fujifilm will then use those proceeds to purchase 50.1% of new Xerox shares.

Fujifilm CEO Shigetaka Komori said he's "confident" the partnership will help with the reinvention of the companies.

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"Xerox shareholders will receive a $2.5 billion special cash dividend, or approximately $9.80 per share, funded from the combined company's balance sheet, and own 49.9 percent of the combined company at closing", the companies said in a statement. News of the deal comes as Xerox investors have previously requested the United States firm looks into possible strategic avenues. Fuji Xerox is even known as a rare success story for a cross-border joint venture. "The new Fuji Xerox will be better positioned to compete in today's environment with truly global scale, increased presence in fast-growing markets, and innovation capabilities to effectively meet our customers' rapidly-evolving demands". Just ahead of this announcement, Fujifilm announced that it will fire about 10,000 of the 47,000 employees now employed at Fuji Xerox, a move the company estimates will cut costs by about $450 million annually.

Without that charge income rose 26% to $226m, sales were flat at $2.75bn.

Xerox has a news conference call on Wednesday's developments and its earnings planned for 8 a.m.

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