Xerox and Fujifilm have announced the dissolution of their 57-year joint venture, Fuji Xerox. Xerox has agreed to sell its 25% stake in Fuji Xerox and its 51% stake in Xerox International Partners to the Japanese company for $2.3B. Fujifilm will also drop its $1B lawsuit against Xerox for breach of contract when the $6.1B merger deal dramatically fell apart in 2018.
Union members at Fuji Xerox voted to strike on February 25th and 26th over pay issues and union discrimination. E tu, a New Zealand union representing engineering, printing and manufacturing professionals cites the company’s ongoing failure to address their complaints since August of last year.
2018: The Year of the Shake-Up. As we ring in the new year, it seems a good time to reflect on the big industry changes we saw in 2018:
Xerox cut 900 jobs and reduced severance payments in Q3 as part of ongoing restructuring efforts under Icahn-appointed leadership. In addition to these cuts, Xerox reduced severance in 2018, paying out $40 million in Q3 compared to the $39 million paid for the 600 layoffs in Q3 2017.
If you haven’t been keeping up with the story over the past week, you may be a bit confused. At this point, the $6.1 billion Xerox-Fujifilm merger deal announced back in January has been cancelled, reaffirmed and then cancelled again since May 1st.
What this ultimately comes down to is a power struggle between the Xerox board of directors and activist-investors, Carl Icahn and Darwin Deason, who own 15% of the company. Icahn and Deason came out on top in the end, forcing the Xerox board to terminate the Fujifilm deal before turning in their final (probably) resignations. As part of the settlement, the investors have replaced the Xerox CEO, Chairman and three other board members with people of their own choosing. This new Xerox board “plans to meet immediately and, among other things, begin a process to evaluate all strategic alternatives to maximize shareholder value.”
Fujifilm, as reported by Reuters, is disputing Xerox’s legal right to terminate the agreement and is “looking at all options including bringing legal action seeking damages.” According to the Wall Street Journal, Fujifilm will present the same merger offer to the new Xerox board. “We are not in a hurry, nor do we want a deal on any terms,” a Fujifilm spokeswoman said. “Fujifilm has its shareholders, and we will not accept a deal that is not rational or acceptable.”