XEROX AGREES TO SELL HALF OF FUJI XEROX STAKE TO FUJIFILM FOR MORE THAN $1.3
BILLION
Xerox has agreed to sell half of its stake in Fuji Xerox Co. Ltd. to Fuji
Photo Film Co., Ltd. for 160 billion Yen, more than $1.3 billion based on
recent exchange rates. The transaction brings to nearly $2 billion the
amount Xerox has raised in asset dispositions since December, representing a
critical milestone in the company's turnaround plan.
Under the agreement, Fujifilm's ownership interest in Fuji Xerox is
increased from 50 percent to 75 percent. While Xerox's ownership interest
is decreased to 25 percent, the company retains significant rights as a
minority shareholder. All product and technology agreements between Xerox
and Fuji Xerox continue, ensuring that the two companies retain
uninterrupted access to each other's portfolio of patents, technology and
products. With its business scope focused on document processing, Fuji Xerox
will continue to provide color office product technology to Xerox and
collaborate with Xerox on research and development. Xerox maintains its
agreement with Fuji Xerox to provide high-end production publishing and
solid ink products.
"With this transaction, Xerox greatly enhances our liquidity and has made
significant progress on our turnaround pledge to generate more than $2
billion in asset sales," said Paul Allaire, Xerox chairman and chief
executive officer. "The agreement also preserves the benefits of a model
American-Japanese business partnership as Xerox and Fuji Xerox continue to
collaborate on and exchange the most innovative technology in the document
processing industry."
In October of last year, Xerox announced a three-pronged turnaround plan
that includes the sale of assets generating $2 billion to $4 billion; cost
reductions exceeding $1 billion, and a sharpened focus on its strategic core
businesses - especially document services, high-end printing solutions and
color across the product line. In December, Xerox completed the sale of
Xerox (China) Ltd. and Xerox (Hong Kong) Ltd. to Fuji Xerox for $550 million
cash.
"Today we have not only delivered on a key element of our asset sale
strategy but also reached a significant turning point in our progress
towards restored financial strength. Furthermore, our cost reduction efforts
are being aggressively implemented and remain on target to achieve the
desired results. And the company's core product and service offerings
continue to lead the industry in technology and quality," Allaire said. "In
short, we are executing on each element of our turnaround plan."
The agreement will result in an after-tax gain of approximately $310 million
and is expected to close by the end of March, subject to the completion of
the Japanese regulatory requirements.
-TAX ENDS-
Today at Xerox is posted on the Xerox WebBoard at
xww.internal.xerox.com A search engine is available to help you
find articles from as far back as January, 1993. |
