Fujifilm wins appeal to push $6.1–B merger deal with Xerox

TOKYO (Reuters) — Japan’s Fujifilm Holdings Corp. has won an appeal in its legal battles with Xerox Corp., with a New York court overturning preliminary injunctions requested by an activist investor that had blocked their planned merger.

Xerox in May scrapped a $6.1 billion deal with Fujifilm in a settlement with investors Carl Icahn and Darwin Deason that also handed control of the US photocopier giant to new management.

“(The) Court’s decision will allow us to discuss with Xerox the fulfillment of the original agreement. All Xerox shareholders ought to be able to decide for themselves the operational, financial, and strategic merits of the transac- tion to combine Fuji Xerox and Xerox,” it said.

The two companies agreed in January to a complex deal that would have merged Xerox into their Asia joint venture Fuji Xerox and given Fujifilm control. That prompted Icahn and Deason, who own 15 percent of Xerox and argued the US firm was being undervalued, to launch a proxy fight.

Representatives for Xerox, Deason and Icahn were not immediately available for comment.

The New York court found in its Oct. 16 ruling that Xerox’s former CEO Jeff Jacobson, accused by Deason of negotiating the deal to save his own job, had neither misled or misinformed the board.

“The board, which engaged outside advisors and discussed the proposed transaction on numerous occasions prior to voting on agreeing to present it to the shareholders, did not engage in a mere post hoc review, nor was the transaction unreasonable on its face,” the ruling also said.

The bitter legal wrangling has created much uncertainty for the two firms which are seen by many analysts as inextricably intertwined through their Fuji Xerox joint venture.

The venture accounts for nearly half of Fujifilm’s revenue while Xerox no longer builds its own office copiers, instead relying mostly on Fuji Xerox.