Xerox Holdings Corp., Norwalk, Conn., announced it entered into an agreement with Fujifilm Holdings Corp. and assorted subsidiaries to sell to Fujifilm its 25% state in Fuji Xerox Co. Ltd., putting an end to one of the most rancorous corporate divorces in recent memory. The company also sold Xerox’s 51% stake in Xerox International Partners (XIP), an OEM joint venture between Xerox and Fuji Xerox, which, together with the grant of a new IP license, will allow Fuji Xerox to OEM products in exchange for a fixed royalty, the company said. The deal also dismisses Fujifilm’s $1 billion lawsuit it filed against Xerox after last year’s merger talks failed.
Xerox stated it plans to use the approximately $2.3 billion proceeds to pursue mergers and acquisitions, to pay shareholder dividends and to pay down debt.
“These agreements reset our relationship with FUJIFILM and provide both companies with tremendous opportunities to grow, together and independently,” said John Visentin, vice chairman and CEO of Xerox. “These agreements also unlock significant unrealized value for our shareholders, provide greater clarity for our customers and help us speed our transformation to a digital-first company.”
“Full ownership of Fuji Xerox will facilitate faster decision making in a rapidly changing business environment,” said Shigetaka Komori, chairman and CEO, Fujifilm. “At the same time, Fuji Xerox will be able to further strengthen its business by capturing new OEM opportunities in the global market, leveraging our world-leading product development and manufacturing capabilities. We are excited to start a new chapter for Fujifilm and Fuji Xerox.”
In a statement, Fujifilm says it expects big things from the acquisition, including an expansion of worldwide OEM business:
While it will continue to supply its products to Xerox under an existing agreement, Fuji Xerox will also strengthen its Document Solutions business in several ways. Most important, Fuji Xerox will have expanded OEM opportunities and supply products such as printer engines to customers worldwide, including the U.S. and Europe, leveraging its world-leading product development and manufacturing capabilities. Fuji Xerox will be ideally positioned to build on its increasingly sophisticated technology including expertise relating to cloud, artificial intelligence, and the Internet of Things, accelerating further expansion into adjacent areas.