Photocopier Giant, Xerox Corp, May Merge With Fujifilm

Xerox Corp saw its shares surge in pre-market trading this Thursday after it was reported that the photocopier giant might be in talks with Japanese camera maker, Fujifilm, for a potential merger. The move may be due to Xerox Corp’s failing to pool in a constant source of revenue amid shrinking demand for its printer and copier business. This pressure reportedly came from company investor, Carl Icahn, who wants Xerox Corp to boost its returns. Ichan currently owns a stake of 9.7 percent in Xerox Corp, making him the biggest shareholder in the company.

Fujifilm is also looking for a way to extend its stake in the copier business via document solutions services.

Xerox and Fujifilm already have a sturdy connection thanks to a fifty-year-old joint venture focusing on the Asia Pacific region with Xerox extending its services to the rest of the world. Sources familiar with the matter have said that a full takeover of the Norwalk, Connecticut-based Xerox is not part of the discussion.

Fujifilm’s market value is at about $22 billion while Xerox is valued at around $7.7 billion.  News of a potential deal boosted Xerox Corp’s shares 9.88 percent, pointing to an opening bell price of $30.35 per share. This would be the company’s highest value since the end of October and it would steady the company’s three-month decline to about 7.2 percent.

Icahn stated in December that Xerox is “desperately” looking for new leadership, as the company’s product output was slowing down causing a fall in their sales revenue.

As for Fujifilm, its shares fell 1.8 percent in Tokyo to 4,724 yen after the reports of a potential merger.

The two multinational companies founded a joint venture in 1962 called Fuji Xerox, which accounts for almost half of Fujifilm’s sales and operating profit.

Neither Xerox nor Fujifilm have commented on the recent reports.

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