Xerox is making a major change to a longtime joint venture with Fuji.
Xerox has announced that it will sell its 25% stake in Fuji Xerox to FUJIFILM in a deal that will see Xerox receive about $2.3 billion.
As part of the agreement, Xerox will also sell its majority stake in another, smaller joint venture that it had with Fuji Xerox.
Xerox says it will use the proceeds to pursue potential mergers and acquisitions as well as return capital to shareholders and pay down some debt.
Xerox Vice Chairman and CEO John Visentin said, “These agreements reset our relationship with FUJIFILM and provide both companies with tremendous opportunities to grow, together and independentl. These agreements also unlock significant unrealized value for our shareholders, provide greater clarity for our customers and help us speed our transformation to a digital-first company.”
Fuji Xerox will continue to supply equipment to Xerox under an existing agreement.
The agreement will also see dismissal of a $1billion lawsuit that Fuji had filed against Xerox after the company pulled out of a deal that would have seen Fuji get a majority stake in Xerox.
The wrangling over that proposed merger last year eventually led to new management at Xerox.
At Brighton Securities, Chairman George Conboy says this was a good move by Xerox managment, even though they Fuji Xerox arrangement had been around for more than 50 years.
"They’d worked together for a long time, 57 years, but the markets have changed quite a bit and Xerox has needed the cash. Xerox had been struggling for years. But now, Xerox gets cash, stays independent and with good management, may be able to grow the company a bit," Conboy said.