February 1, 2018

Fuji Xerox and Xerox to become a new Fuji Xerox

Fujifilm Holdings Corporation and Xerox Corporation have entered into a definitive agreement to combine Fuji Xerox Co., Ltd. and Xerox. According to a press release, the two companies will merge by Fuji Xerox becoming a 100 percent subsidiary of Xerox, and Xerox will change its name to Fuji Xerox, of which Fujifilm will acquire the majority 50.1 percent stake. The transaction has been unanimously approved by the Board of Directors of Fujifilm and Xerox.

Founded in 1962, Fuji Xerox - currently a 75-25 joint venture between Fujifilm and Xerox - is a leading Document Solution Company. During the past 56 years, Fujifilm and Xerox have deepened their mutual cooperation in technology and other areas, sulting in Fuji Xerox’s reputation to be one of the most successful cross-border joint ventures. Fuji Xerox operates mainly in Japan and the Asia Pacific, while Xerox focuses on the U.S. and European markets. Fuji Xerox and Xerox revolutionized office work with Xerography, and have been offering a wide range of products and services to support customers in communications and promoting value creation.

The new Fuji Xerox is set to become a world-leading Document Solution Company by revenue, the company said. Under a globally unified management strategy, the combined company will further accelerate its business growth and offer new value to customers. By leveraging Fujifilm’s vast range of technologies, as well as its experience and knowhow in creating new businesses, New Fuji Xerox will accelerate its transformation, as a leading company not only in the office document business, which it has the No.1 position in, but also in commercial printing, centered around inkjet, as well as various types of industrial printing, and solution services that improve operational processes and productivity.

The combined company is expected to deliver a total of US$ 1.7 billion in total annual cost savings by 2022, with approximately US$ 1.2 billion of the total cost savings expected to be achieved by 2020. As part of this cost improvement initiatives, the existing Fuji Xerox will implement a fundamental structural reform, in order to improve earnings and productivity, and transform itself into a lean company.

The new Fuji Xerox’s Board of Directors will include twelve members, seven of them appointed by Fujifilm, while five independent directors will be appointed by Xerox. Shigetaka Komori, Chairman and Chief Operating Officer of Fujifilm and Chairman of the existing Fuji Xerox, will serve as Chairman of the Board. Upon close of the transaction, Jeff Jacobson, current CEO of Xerox, will serve as Chief Executive Officer of the new Fuji Xerox.

There will be no cash outflow from Fujifilm related to the acquisition. Fuji Xerox will buy back the 75 percent stake in Fuji Xerox owned by Fujifilm. Fujifilm will use the proceeds from selling the 75 percent stake to acquire 50.1 percent of the new shares of Xerox. The new Fuji Xerox, which will become a consolidated subsidiary of Fujifilm, will maintain its NYSE listing. Both the headquarters of the current Xerox (Norwalk, Connecticut, U.S.A.) and the headquarters of the current Fuji Xerox (Minato, Tokyo, Japan) are to be used as headquarters of the new Fuji Xerox. The closing of this transaction is subject to certain conditions, including approval in Xerox’s shareholders’ meeting, as well as the completion of processes required by laws and regulations.

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