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Xerox anticipates long-term shareholder value

Xerox has issued a statement to outline its key aims for the business, explaining that the link-up with Fuji Xerox will create “long-term” value for its shareholders.

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Xerox announced in January that it had struck a deal to combine with Fuji Xerox

In January, Xerox announced plans to combine with Fuji Xerox—a joint venture established by the two digital printing heavyweights 56 years ago—in order to deliver “innovative print technologies and intelligent work solutions”.

Having undertaken a comprehensive review of the firm’s strategic and financial alternatives, the Xerox board has now reached out to shareholders to explain how the merger will benefit them in the long-term.

“Xerox shareholders will be owners of a larger, stronger and more valuable company with enhanced prospects for growth and value creation,” Xerox said in a letter to shareholders.

“Xerox and Fujifilm are already closely aligned, and both have demonstrated track records of success in transformation. The agreement establishes strong governance and ownership safeguards for current Xerox shareholders; and

“The existing Fuji Xerox joint venture has been integral to our competitiveness for many years and the combination will optimise the benefits of the partnership for our company.”

The existing Fuji Xerox joint venture has been integral to our competitiveness for many years and the combination will optimise the benefits of the partnership for our company

Should the planned merger go ahead, Xerox would hold a 49.9 per cent stake in the combined business, with Fujifilm taking the majority 50.1 percent. The deal should go through in the second half of the current year.

Xerox says the transaction will provide its shareholders with “significant value”, both at closing and over time. This will include a $2.5bn (£1.79bn) cash dividend that will be paid to Xerox shareholders, should the deal go ahead.

“The relative ownership of the combined company is favourable to current Xerox shareholders and implies an over 15 percent premium relative to Xerox’s unaffected stock price of $30.35, which was prior to media reports about a potential transaction on January 10, 2018,” Xerox said in the letter.

 “In addition, Xerox and Fujifilm teams have already identified $1.25bn in annual cost savings opportunities from combining the two companies, demonstrating the highly synergistic attributes of this transaction.”

Xerox added: “The transaction will create an industry leader with $18bn in revenue that is better positioned to compete and capture growth opportunities in the marketplace by leveraging the global reach, scale, technology and innovation strengths of the two companies. 

“With direct access to high-growth markets in Asia Pacific, Xerox will operate as a truly global platform for the first time in its history.”

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