Xerox, an icon of corporate America that pioneered the office copy machine as well as the graphic interface and mouse used with today's computers, only to be blindsided by the digital revolution, is coming under Japanese control.
The company said Wednesday that it would combine its operations with its joint venture with Fujifilm Holdings of Japan. Fujifilm would own just over 50 percent of the business, which would aim to cut $1.7 billion in costs in coming years. Separately, Fujifilm said Wednesday that it would cut about 10,000 jobs internationally because of "increasingly severe" market conditions.
The deal would end Xerox's 115 years as an independent company. Its copy machines were once so popular that the word "Xerox" became a ubiquitous verb for making copies, whether on one of its machines or on those of its rivals.
But in recent decades, it grappled with the rise of email and the move by offices around the world to send and share documents electronically. Activist shareholders such as Carl Icahn had pushed the company to get new board members and to shake up its business.
Under the deal, Xerox, of Norwalk, Conn., will become part of the Fuji Xerox joint venture, which sells office products and services in the Asia-Pacific region. As part of the deal, it will issue a combined $2.5 billion in cash dividends to its shareholders.
The combined company would have $18 billion in annual revenue and would continue to trade on the New York Stock Exchange under Xerox's ticker symbol, XRX.
"I am confident that Fujifilm's ability to drive change as well as its experience of successful reinvention will give a competitive edge to the new Fuji Xerox, delivering significant value creation to shareholders of both the new Fuji Xerox and Fujifilm," Shigetaka Komori, chairman and chief executive officer of Fujifilm, said in a written statement.
Xerox has its origins in the founding in 1903 of the M.H. Kuhn Co., according to its official corporate history, and in its early days made and sold photographic paper. It won the right to explore a technology, invented by Chester Carlson, that led to the creation of the modern copy machine in 1938, and in 1959 Xerox offered an office copier that popularized the device.
It was less successful, however, with some other innovations, especially considering how popular the technologies became when adopted by others.
Xerox developed an early computer that offered a mouse and graphic screen that allowed the user to navigate across the face of a monitor instead of typing on a keyboard -- the very technology used by just about everybody using Apple or Microsoft software today.
But the company was not able to turn those innovations into commercial successes. Xerox fought Apple in court after the computer company enjoyed tremendous popularity with its Macintosh computers, which used similar technology.
Still, Fujifilm said Wednesday that there were challenges ahead. The company reduced its expectations for operating income by nearly 30 percent in an earnings forecast and said it would cut 10,000 jobs around the world. It warned the environment for its Fuji Xerox venture was "increasingly severe" and "a fundamental structural reform will be implemented."
Xerox's shares, which have traded in a steady range in recent years despite a broad run-up in the stock market, rose about 12 percent over the past month in anticipation of a deal.
Business on 02/01/2018