FUJI BUYS XEROX, END OF AN AMERICAN ICON

Fujifilm Holdings is buying control of Xerox in a deal that creates an $18 billion company and marks the end of the independence of the iconic American corporate giant.

Xerox, which has a market value of $8.3 billion, will first merge with a joint venture the company operates with Fujifilm in Asia, according to a statement Wednesday. Current Xerox shareholders will receive a cash dividend of $9.80 per share. In a complex transaction, Tokyo-based Fujifilm will ultimately end up owning 50.1 per cent of the combined entity, which expands the joint venture to encompass all of Xerox’s operations.

The deal will make for a more global company, according to Simon Chan, an analyst at Bloomberg Intelligence. “In the past, Fuji Xerox only operated in the Asia-Pacific region, and Xerox targets the Americas and Europe,” Chan said. “With the combined company, they can share cost on research, product development and potentially manufacturing capacity as well.”

The deal marks the end of independence for a US company whose roots trace back to the start of the 20th century. While Xerox became famous for its hardware, it has fallen on hard times as Canon and Asian competitors eroded its dominance while email and other forms of electronic communications took over. The new company will accelerate revenue growth through its global reach and pursue developments in inkjet, imaging and artificial intelligence, it said.

The joint venture will cut 10,000 jobs in Asia as part of the restructuring as the Japanese company struggles with an “increasingly severe” market environment, Fujifilm said Wednesday.

The new combined company, Fuji Xerox, will trade on the New York Stock Exchange and have dual headquarters in Norwalk, Connecticut, and Tokyo. Jeff Jacobson, chief executive officer of Xerox who has come under criticism from activist investor Carl Icahn, will become CEO of the combined company. “The proposed combination has compelling industrial logic and will unlock significant growth and productivity opportunities for the combined company, while delivering substantial value to Xerox shareholders,” Jacobson said in the statement.