Xerox is supposedly considering to acquire HP Inc., a company which has more turnover and a greater market value than Xerox. The offer would constitute a full acquisition of the competitor.
Insiders tell The Wall Street Journal that Xerox wants to make an offer of cash and shares for HP. HP now has a market value of about 27 billion dollars (24 billion euros). The exact amount of a possible bid is still unknown, but it would be higher than the current price for HP shares on the stock exchange.
The possibility to acquire HP, was discussed yesterday, say the insiders. However, there is no guarantee that Xerox will indeed make an offer, or that such an offer will have the desired outcome: an acquisition. It is a striking rumour, since HP is three times larger than Xerox and has just installed a new CEO.
Where does the money come from?
Xerox will probably have to put in a lot of money for HP if it wants to make a serious offer. But according to the insiders, that’s also possible. Xerox, for example, expects a further $2.3 billion (€2 billion) because it has sold shares in its joint venture with Fujifilm Holdings.
Xerox has worked with Fujifilm for 57 years, with whom it tried to merge last year. The merger was terminated at the last minute. The merger would have integrated Xerox into the Fuji-Xerox joint venture, which is 75 percent owned by Fujifilm. Icahn and Deason, who owned 15 percent of Xerox, thought this was a bad plan.
According to the insiders, Xerox also receives money, because it has an informal financing arrangement with a large bank.
Reducing costs together
Should a takeover indeed take place, two well-known names on the printer market will be merged. Both companies have been struggling for some time now that there is less and less demand for printed documents and, therefore, also for printers.
So, the two companies are both trying to save money. According to the insiders, a merger can help. In fact, by working together and, therefore, cutting costs together, more than 2 billion dollars (1.8 billion euros) could be saved, according to the sources.