Xerox has scrapped a planned $6.1 billion deal with Fujifilm Holdings Corp. in a settlement with activist investors Carl Icahn and Darwin Deason that also hands control of the US photocopier giant to new management.
The victory for the billionaire investors puts the Japanese company further on the back foot in any new negotiations with Xerox, although it is by no means out of contention as Xerox is now expected to go up for sale in an auction at a higher price, Reuters reported. Fujifilm was quick to take a combative stance, saying in a statement it disputes Xerox’s unilateral decision to terminate the transaction and would look at all options including legal action seeking damages.
The two companies agreed in January to a complex deal that would merge Xerox into their Asia joint venture Fuji Xerox. The deal prompted activist investors Carl Icahn and Darwin Deason, who own 15% of Xerox, to launch a proxy fight.
The activist investors have also said they are unhappy with the current structure of the joint venture, and settlement creates uncertainty concerning potential changes to a business that accounts for nearly half of Fujifilm’s revenue.
The settlement will see Chief Executive Officer Jeff Jacobson—the main architect of the deal with Fujifilm—as well as five other directors step down. John Visentin is expected to take the helm.
It is Xerox’s second settlement with the activist investors in just two weeks. The first settlement agreement was allowed to expire as Xerox came to believe it had flexibility to renegotiate a deal with Fujifilm and also took into account a stock dive that followed the agreement.
