Fujifilm swallows Xerox in US$6.1bn deal

Australian printers are unlikely to see much direct change as a result Fujifilm buying Xerox in a US$6.1bn deal which creates a US$18bn business.

As part of the Asia Pacific region Australia is already covered by Fuji Xerox in an arrangement dating from 1962, which has Fujifilm as a 75 per cent owner. The new deal is for Fujifilm to buy the rest of Xerox, giving it 50.1 per cent ownership of the iconic American business.

However under the acquisition some 10,000 jobs are likely to go, a significant number of them likely in the Asia Pacific region.

The new Fuji Xerox has flagged commercial inkjet technology, industrial printing and business solutions as growth areas, as have rivals Konica Minolta, Ricoh and Canon.

Fujifilm paid US$6.1bn for the Xerox company, despite it being valued at US$8bn on the day of the acquisition. The company believes it has an ‘addressable market’ of US$120m with another US$100m in the growth areas.

The mega deal came just a week after the number one and number three shareholders in Xerox called for the board, including CEO Jeff Jacobson, to be sacked. Jacobson has survived and will be the CEO of the new Fuji Xerox.

[Related: Steve Green joins Fuji Xerox]

The Xerox shareholders will now receive a $2.5bn dividend from the deal and will own 49.9 per cent of the new business

The new business will be looking to cut costs, create new income streams outside of print, and of course increase profits. Xerox has just reported Q4 17 net loss of US$196m, on sales that were down 2 per cent to US$2.7bn.

Jeff Jacobson says the new Fuji Xerox will be ‘dramatically stronger and more competitive’.

The deal comes as the company here and overseas has been sailing through choppy waters on several fronts, it has lost its number one spot in A3 printers to Konica Minolta, and it is seeing the printer market overall decline, while locally it was rocked by the $450m accounting scandal in New Zealand and Australia under the tenure of former CEO Neil Whittaker, and just last week the Australian Electoral Commission received a smack down from the National Audit Office over its $27m contract with the Fuji Xerox  Document Management Business for not achieving value.

In addition Fujifilm in Australia is currently being sued by former CEO Dave Marshall who is alleging ageism.

One change in Australia is that Fuji Xerox Printers which is the office and consumer business of the company will be relocating into the Fuji Xerox Australia business.