The Japanese company will now own 50.1% of the combined company; has plans to cut 10,000 jobs in Fuji Xerox.
In an effort to cut costs, Fujifilm and Xerox announced that they have entered into an agreement to combine Xerox and their Fuji Xerox joint venture. The combined company will operate under the name “Fuji Xerox”.
Following news of the acquisition, Fujifilm announced that it will be cutting 10,000 jobs in the Fuji Xerox arm in Asia Pacific. This could well eliminate a fifth of Fuji Xerox’s current workforce. The job cuts are expected to occur by March 2020.
“The market environment surrounding the company’s subsidiary Fuji Xerox has grown increasingly severe,” said Fujifilm.
The company added that "personnel reductions of 10,000 people domestically and overseas" at the subsidiary will be part of a cost-cutting plan to save US$460m.
Xerox’s CEO, Jeff Jacobson, will continue to serve as CEO of the new combined entity. This is despite calls by two of Xerox’s major shareholders to have current Xerox leadership replaced. Fujifilm’s CEO, Shigetaka Komori will be chairman of the new Fuji Xerox.
The new Fuji Xerox is expected to have US$18 billion in annual revenue and will trade on the NYSE under the ticker XRX. At the close of the deal, existing Xerox stockholders will receive a US$2.5 billion cash dividend, or US$9.8 per share.
Leveraging Fujifilm’s technologies, the new Fuji Xerox aims to lead in the growing business areas including high-speed inkjet, packaging, industrial print and workplace automation. It will also address future development opportunities in artificial intelligence, machine learning, internet of things and augmented reality.
Prior to the agreement, Fuji Xerox operates within the Asia Pacific region, while Xerox handles Europe and North America. Under the combined company, Fuji Xerox hopes to have “significant revenue synergy opportunities over time as it capitalises on its global reach, industry-leading scale and enhanced innovation capabilities.”
The new firm will have dual headquarters in the US and Japan, with continued presence in over 180 countries. The combined company will maintain the “Xerox” and “Fuji Xerox” brands within its respective operating regions.