At its Board of Directors meeting held earlier today, Fujifilm entered into an agreement with its subsidiary Fuji Xerox Company Limited (Fuji Xerox) and Xerox Corporation to the effect that Xerox will make Fuji Xerox a wholly-owned subsidiary – and that the company will own 50.1% of the shares of Xerox after it makes Fuji Xerox a wholly-owned subsidiary. Fuji Xerox and Xerox will be combined under the Fujifilm group umbrella, will be defined as the “combination of the two companies,” and will be named New Fuji Xerox in a transaction estimated at $6.1 billion (even though a Fujifilm communications counsel later indicated that the $6.1 billion [USD] figure put out was incorrect, saying it’s really a “share exchange” and Fujifilm is receiving a 50.1% ownership interest in the new combined company). On the negative side, Japan’s Fujifilm Holdings said it’s cutting 10,000 jobs globally in addition to its joint venture with Xerox Corporation, to cope with a decline in the photocopying business worldwide.
Rationale for combining the two companies. Fuji Xerox is a document solutions company founded in 1962, with 75% of its capital invested by the company and 25% by Xerox. Through a joint-venture-based partnership spanning 56 years, the company and Xerox have deepened their multi-faceted mutual cooperation on technology, and built a strong relationship of trust. Fuji Xerox is actually a rare success story for a cross-border joint venture. Fuji Xerox is mainly engaged in business in Japan and the Asia Pacific region, while Xerox primarily does business in the U.S. and Europe. The parties added that the combination of the two companies is the best way to increase corporate value, and it’s also expected that this combination will generate a large number of synergies. In the past, the two companies have provided solutions that solve management and business challenges, “revolutionizing offices with xerographic technology and supporting the communication activities and value creation of customers through a variety of products and services.”
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, it will realize “further acceleration of business growth and new value creation for customers.” In addition to its size, New Fuji Xerox will also have management resources such as high-value brands, as well as the cutting-edge technology and human resources that support those brands, as well as global marketing power and a superior customer base. New Fuji Xerox “will accelerate business reform” not only as an office document business, but also as a leading company engaged in a wide range of businesses in fields such as commercial printing centered on inkjet technology, as well as various types of industrial printing, and solutions and services that improve business process and productivity.
Seven of the 12 Directors on New Fuji Xerox’s Board will be nominated by the company, and 5 will be nominated from current independent Directors at Xerox. Shigetaka Komori, Chairman and CEO of the company and Chairman of Fuji Xerox, will be appointed as a Chairman of the Board of New Fuji Xerox. The company added that those who can maximize the strengths of New Fuji Xerox will be promoted without considering their originating company, or whether a capital relationship exists.
Jeff Jacobson, current Chief Executive Officer of Xerox, will be appointed as Chief Executive Officer of New Fuji Xerox. To date, the company has continued to grow by building powerful business platforms in various business areas such as healthcare, high-functional materials, and documents – as well as by achieving “structural re-adjustments” in existing businesses such as photography and digital cameras.
As the largest documents company in the world, New Fuji Xerox “will accelerate new value creation that leads to improved productivity in the office field, and will endeavour to enhance profitability. The company will further accelerate the growth of the Fujifilm Group as a whole by continuing to invest in growth businesses such as healthcare and high-functional materials.” Here’s a brief explanatory video from Jacobsen that was supplied by Xerox: