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Fujifilm Buys Control of Xerox, Jacobson to Lead New Company

Press release from the issuing company

FUJIFILM Holdings Corporation (the “Company”) resolved as follows at a meeting of its Board of Directors held on January 31, 2018 to enter into an agreement with its subsidiary Fuji Xerox Co., Ltd. (“Fuji Xerox”) and Xerox Corporation (a U.S. corporation listed on the New York Stock Exchange (“NYSE”) (“Xerox”)) 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 by way of subscribing for a capital increase by third-party allotment of Xerox after it makes Fuji Xerox a wholly-owned subsidiary (the Company to own 50.1% of the shares of Xerox after it makes Fuji Xerox a wholly-owned subsidiary, and Fuji Xerox and Xerox being combined under the FUJIFILM group umbrella, is hereafter defined as the “Combination of the two companies”), and the Company has now executed such agreement.

I. FUJIFILM Holdings to own 50.1% of Xerox shares (making Xerox a subsidiary) and combination of Fuji Xerox and Xerox

1. Reasons for the Combination of the two companies

Fuji Xerox is a document solutions company founded in 1962, currently 75% of whose capital was 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, etc. and built a strong relationship of trust. Fuji Xerox is even known as a rare success story for a cross-border joint venture. The Combination of the two companies is the optimal conclusion for both the Company has been determined by considering various options to increase corporate value, and it is expected that this combination will generate a large number of synergies. Fuji Xerox is mainly engaged in business in Japan and the Asia Pacific region, while Xerox is mainly engaged in business in U.S. and Europe. 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.

Now, the Company will make Xerox an owned subsidiary after Xerox makes Fuji Xerox a wholly-owned subsidiary, and Xerox will be renamed “Fuji Xerox” (in this announcement, “New Fuji Xerox”). The Company will hold 50.1% of the shares of New Fuji Xerox, and New Fuji Xerox will maintain its listing on the NYSE. Also, it is planned that the current brands of both Fuji Xerox and Xerox will continue to be used after the Combination of the two companies.

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. In addition to its size, New Fuji Xerox will also have management resources such as high-value brands and the cutting-edge technology and excellent human resources that support those brands, as well as global marketing power and a superior customer base.

In addition, by taking these aspects of New Fuji Xerox and then utilizing the strengths of the Company such as its wide range of technology and its experience and know-how regarding new business creation, 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 services that improve business process and productivity.

Strategy for New Fuji Xerox

Based on a globally unified marketing strategy, provide products and services that are competitive in the office market, and further accelerate an increase in market share in each region and the acquisition of global accounts

  • By optimizing all the value chains at New Fuji Xerox including R&D, manufacturing, procurement, and logistics, realize timely injection of new products into the market and improved cost competitiveness
  • By combining the image processing technology that is the Company’s specialty and the document- related AI technology held by New Fuji Xerox, automate work processes that differ for each industry and customer and provide solutions services that realize further improvements in productivity
  • By taking the advanced technology held by the Company in areas such as photographs, inkjet, photolithography (see Note), and optical, and the technology held by New Fuji Xerox in the document area, then leveraging these technologies to form a combination that competitors do not have, realize innovative product development and expand market domains

Note: Photolithography is a technology used in semiconductor fabrication and the like that adapts photograph development technology to create microscopic patterns.

Governance of New Fuji Xerox

Board of Directors

  • Seven of the twelve Directors on the Board of Directors of New Fuji Xerox will be nominated by the Company and five will be nominated from among the current independent directors of Xerox
  • Shigetaka Komori, Chairman and Chief Executive Officer of the Company and Chairman of Fuji Xerox, will be appointed as a chairman of the Board of New Fuji Xerox concurrently
  • From the perspective of minority shareholder protection, a “conflict committee” comprising independent directors will be established that will make prior evaluations and approvals regarding transactions between group companies

Execution of Management

  • An organizational structure will be built that enables the strengths of both Fuji Xerox and Xerox to be maximized
  • Optimal human resources who are able to 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 business structural readjustments in existing businesses such as photography and digital cameras by taking rapid and appropriate responses to sudden changes in market environments. As the largest documents company in the world, and by utilizing fusion with the wide range of marking technology held by the Company in fields spanning from imaging to industrial, and the management know-how and experience of the Company regarding business reforms, New Fuji Xerox will accelerate new value creation that leads to improved productivity in the office field and will endeavor to enhance the profitability. The Company will further accelerate the growth of the FUJIFILM group as a whole by continuing to invest in growth business such as healthcare and high-functional materials.

2. Method of the Combination of the two companies

The Combination of the two companies will be conducted through three transactions, and the Company will own 50.1% of the shares issued by Xerox without any cash outflow from the FUJIFILM group.

  1. (i)  Fuji Xerox will procure borrowings of JPY 671 billion from financial institutions, acquire from the Company as treasury stock 75% of the total number of issued shares of Fuji Xerox held by the Company, and the Company will receive JPY 671 billion as consideration therefor. As a result, Xerox, which held 25% of the total number of issued shares of Fuji Xerox, will come to hold 100% of the shares of Fuji Xerox.
  2. (ii)  Xerox will pay a special dividend of USD 2,500 million to its existing shareholders.
  3. (iii)  Xerox after making Fuji Xerox a wholly-owned subsidiary will conduct a capital increase by third party allotment with the Company as subscriber, and the Company will acquire 50.1% of the total number of issued shares of Xerox after such capital increase by third party allotment. The total amount to be paid in through such capital increase by third-party allotment will be USD 6,100 million (equal to the JPY 671 billion received by the Company in (i) above). The JPY 671 billion received by the Company will be contributed to Fuji Xerox through Xerox or the subsidiaries of Xerox after the capital increase by third party allotment above, then applied to the repayment of the borrowings in (i) above.

Full Release



By Andrew Tribute on Jan 31, 2018

This is a very logical move and one that I have expected for some time. In recent years Xerox has been split into the production printing and document company, and the business process outsourcing company. Before this happened I had commented that I felt Xerox was losing interest in the traditional Xerox business and was concentrating too much on the services area. For years Fujifilm through its majority ownership of Fuji Xerox and Xerox had worked well together. FujiXerox providing the mass market products and Xerox the higher end production printing products. For years Xerox largely dismissed liquid inkjet as the technology for high speed printing and pushed its solid ink technology which was unable to provided the quality and speed of drop on demand liquid inkjet. It was only since the acquisition of the French company Impika that one saw a change in impact. Fujifilm however had been significantly more progressive in this area becoming a major player in large format inkjet printing. It made major acquisitions in its own rights in this area with printhead manufacturer Dimatix and ink companies Avicia and Sericol. It also expanded inkjet press manufacture with its J Press 720. It has developed the Dimatix printhead range and in particular the SAMBA that has become the printhead of choice for the leading presses from companies such as Heidelberg and Landa pushing highest quality inkjet printing.

I see real potential for the future with the new FujiXerox incorporating the Fujifilm printhead and other Fujifilm technologies into into core technology structures for the future.

I also see executive understanding in Jeff Jacobson taking on the role of CEO of the new company. Unlike many of his forerunners at Xerox Jeff has both the understanding and vision for the industry. I have known and worked with Jeff for many years from his time at Kodak Polychrome Graphics. I was surprised when he was overlooked many years ago to take on the role of CEO of Kodak. No doubt today as he takes control of this new operation he will thank those who did not give him the poisoned chalice of running Kodak. I wish him well for the future.



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