Xerox offers to merge with HP for $22 a share
Xerox became synonymous with photocopying and printing. HP’s business today is built, in large part, on its printers. Now Xerox wants to combine the two companies.
On Wednesday night, HP announced that it had received a takeover offer on Tuesday from Xerox, after conversations “from time to time about a potential business combination.”
“We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders,” the statement said.
A merger would combine two once-formidable companies that have faced business difficulties in recent years as demand for printed documents and ink has waned.
“Our industry is long overdue for consolidation, and those who move first will have a distinct advantage,” a Xerox spokeswoman, Caroline Gransee-Linsey, said in a statement. “We look forward to expeditiously moving this process forward and creating additional value for shareholders.”
The Wall Street Journal had previously reported that Xerox was considering a cash-andstock offer for HP, which is also one of the world’s largest makers of personal computers. HP has a market value of $27 billion, more than three times that of Xerox. CNBC reported on Thursday that Xerox had offered HP $22 a share in the takeover bid.
The strategic rationale for a deal is largely to cut costs for two companies struggling to navigate the accelerating erosion of the traditional printing business. Analysts estimate that the savings from a merger could be $1.5 billion a year or more.
Both HP and Xerox have announced streamlining measures in recent months. Xerox said it planned to cut costs by more than $640 million. And HP said in October that it would trim as much as 16 percent of its workforce as part of a broader restructuring plan.