Published: Thu, February 01, 2018
Medicine | By Daryl Nelson

Xerox announces merger with Japan-based Fujifilm

Xerox announces merger with Japan-based Fujifilm

Japan's Fujifilm Holdings will take over Xerox Corp.in a $6.1 billion deal, the two companies announced Wednesday.

In a major shake-up, Fujifilm also announced it would be combining Fuji Xerox with U.S. giant Xerox, bringing both companies under its umbrella to create what it said was the world's largest "document solutions company" by revenue. Through a joint venture based partnership spanning 56 years, the Company and Xerox have deepened their multi-faceted mutual cooperation on technology, etc. and built a strong relationship of trust.

This proposed combination provides Xerox shareholders with significant cash at closing, as well as a substantial interest in the significantly enhanced combined company. Fujifilm is due to hold a news conference at 5 p.m. (0800 GMT).

The healthcare industry shuddered Tuesday following the announcement that Amazon, Berkshire Hathaway and JPMorgan Chase plan to form a new company that will attempt to lower healthcare costs for their hundreds of thousands of employees across the US, the Wall Street Journal reports. Fujifilm will own 50.1% of the combined company and provide important operational support and transformational leadership, according to Xerox.

Fuji Xerox mainly has operated in Japan and the rest of Asia, with Xerox handling business in the US and Europe.

Bloomberg reports that the joint venture will eliminate 10,000 jobs globally.

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The firm has a market cap of $139,710.00, a price-to-earnings ratio of 24.89, a P/E/G ratio of 2.81 and a beta of 0.67. Following the transaction, the insider now owns 49,778 shares in the company, valued at approximately $8,378,632.96.

Upon close of the transaction, Jeff Jacobson will serve as chief executive officer of the new Fuji Xerox.

Fujifilm, which generates nearly 60 percent of sales from overseas, is pushing to offset waning demand at its printer and copier hardware business by shifting focus to managed-print services and medical imaging.

The combined company is expected to deliver $1.7 billion in total annual cost savings by 2022, $1.2 billion of which is expected to be achieved by 2020.

New Fuji Xerox will become the largest document solutions company in the world in revenue size, and by deploying its operations worldwide with a uniform management strategy, New Fuji Xerox will realize further acceleration of business growth and new value creation for customers.

The company said it would book restructuring costs of 49 billion yen ($450.95 million) in the current fiscal year, lowering its operating profit forecast for the year to 130 billion yen from a previous 185 billion yen outlook.

Fujifilm's stock plunged in the final minutes of trading in Tokyo on Wednesday before the deal was announced, dropping more than 8 percent to the lowest level since August.

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