Xerox Near Deal to Cede Control to Fujifilm, WSJ Reports

(Bloomberg) -- Xerox Corp. is nearing a deal with Japan’s Fujifilm Holdings Corp. that would mark the end of the independence of the American corporate giant, the Wall Street Journal reported, citing people familiar with the matter.

The deal would combine Xerox with a joint venture the company has with Fujifilm, and the U.S. company’s shareholders would own just under half of the resulting entity, according to the report. As part of the deal, Xerox shareholders would get an implied premium for their stock and cash, the report said. The newspaper said the deal, which could still fall apart, could be announced as early as Wednesday. Xerox has a market value of $8.3 billion.

Shingo Harada, a spokesman at Fujifilm, said the company was not the source of the report and declined to comment further. 

Xerox and Fujifilm have a 55-year-old joint venture--Fuji Xerox Co. in Asia. That venture is the subject of a recent accounting probe into its practices in New Zealand and Australia, which has prompted investor Carl Icahn to call for renegotiating or scrapping their agreement.

Icahn this month teamed up with fellow Xerox investor Darwin Deason to urge the company to explore strategic alternatives and shake up its joint venture with Fujifilm. The pair -- Xerox’s first and third largest shareholders, respectively -- collectively own about 15 percent of Xerox, or more than 40 million shares, according to a letter Jan. 22. Icahn and Deason also called for Xerox to immediately replace Chief Executive Officer Jeff Jacobson, who has been in his post for barely a year.

While Xerox became famous for its hardware, it has fallen on hard times as Canon Inc. and other competitors from Asia eroded its dominance and email and other forms of electronic communications took over.

Fujifilm shares fell 0.5 percent in early trading in Tokyo on Wednesday, dropping for a seventh straight day.

To contact the reporters on this story: Jeff Sutherland in Tokyo at jsutherlan13@bloomberg.net, Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net.

To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Dave McCombs

©2018 Bloomberg L.P.