HP says it has received ‘a proposal’ from Xerox

Is one of Silicon Valley’s most-storied companies on the brink of getting acquired by another longtime tech industry warhorse?

That’s what could soon happen to HP, the PC and printing industry giant that has been a bellwether of the region’s tech sector for eight decades.

After U.S. stock markets closed Wednesday,

HP said it received a “proposal” from Xerox related to an offer to acquire HP. This followed a report from the Wall Street Journal that said Xerox is considering making a cash and stock offer for HP that would value the Palo Alto-based company at $27 billion. The Journal cited “people familiar with the matter” as saying Xerox’s board of directors discussed acquiring HP on Tuesday.

In a statement given to this news organization, HP said that “we have had conversations with Xerox Holdings Corporation from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction.”

HP didn’t disclose any details about Xerox’s proposal. The company did say that it has “great confidence in our multi-year strategy and our ability to position the company for continued success in an evolving industry.”

Xerox didn’t return a request for comment on the matter.

Should a deal occur, it would bring together companies that are well-known, and highly recognized in the tech industry and among the general public, but haven’t been on many people’s minds of late when it comes to thinking of cutting-edge technologies.

Rob Enderle, president of technology research firm the Enderle Group, said that even though HP and Xerox may no longer be among the brightest stars in tech, there are areas where they can still be market leaders.

“The industry is under pressure supporting an argument for consolidation, and HP is uniquely positioned at scale for 3D printing, which is expected to be the next big thing in printing,” Enderle said. “This acquisition, on paper, could be a perfect storm of a deal.”

HP took over the PC and printing business of Hewlett-Packard when that company split in two in 2015. The rest of the old Hewlett-Packard took on the name Hewlett Packard Enterprise, and is responsible for data-storage equipment, servers and other business-related computer services. Xerox remains widely known for its printers and copy machines that are mostly used by businesses. The company also makes money from printing and management services.