Despite the obvious size difference between the two companies, last week Xerox as part of its interest in buying HP. A merger that would allow both companies economies of scale in the order of $ 2 billion.
Eyes bigger than the belly, Xerox? The American company has any ambition whatsoever, as reported by the Wall Street Journal, which revealed on Friday that the company printing services, valued at $ 8 billion, plans to take control of the giant HP. The staff of HP confirmed Wednesday this interest.
“As we pointed out at the last meeting of HP Securities Analysts, we are very confident in our multi-year strategy and our ability to position the company to continue to succeed in a rapidly evolving industry. in particular because of the multiple levers available to stimulate value creation, in this context, we have had conversations with Xerox Holdings Corporation from time to time about a potential business combination. , which would be necessary to justify an operation. More recently we received a proposal forwarded yesterday. We usually take action if there is a better way forward and we will continue to act with deliberation, discipline and in the best interest of all our shareholders “, she said, leaving some doubt about her intentions.
HP valued at 27 billion dollars
With a value of $ 27 billion, HP is about three times the size of Xerox, which also specializes in printers and copiers, which would assume a merger at least bold if it was to take place. Relying on internal sources, the Wall Street Journal said the Xerox board met on Tuesday to review a cash and stock offer at a price higher than HP’s market value. By merging, businesses could save $ 2 billion in annual costs. Note that the US daily also said that Xerox has received an informal financing commitment from a major bank, without the identity of the latter does not filter.
As a reminder, Xerox announced Thursday its willingness to get rid of its 25% stake in the joint venture Fuji-Xerox, which sells products and services related to printing in the Asia-Pacific region. The $ 2.3 billion in proceeds from this sale would facilitate the financing of its HP buyback transaction. Contacted by ZDNet, the management of Xerox had not responded to our requests at the time these lines are written.
Recall that HP, based in Palo Alto, has faced a difficult market in recent years, as well as sudden changes in leadership. Last August, its CEO, Dion Weisler, announced that he was leaving the company for personal reasons and was replaced by the director of Enrique Lores Printing. HP’s financial results in Q3 2019 showed a 5% year-on-year decline in printing revenues. And last month, it announced that it would reduce its workforce by 9,000 worldwide starting in 2020 as part of a corporate restructuring.