Talks are underway between Xerox and Fujifilm which will lead to a major deal, but not to the takeover of the American company according to reports in the Wall Street Journal last week.
The report was scant on details, suggesting however that a change in the board would result. The two companies have been close for 50 years when Fuji Xerox became the sales channel for Xerox products into Asia. It is now owned 75% by Fuji after the company extended its ownership during a previous Xerox crisis.
This deal continues, with Fuji Xerox achieving sales of £7,095 million in its last financial year, 13% of which came from production printing. Fuji Xerox also supplies technology that is sold under the Xerox brand in North America and Europe, including the Versant models and forthcoming Iridesse six-colour machine. In its most recent annual report Fujifilm points to steady sales growth in colour presses.
Xerox split into a traditional document handling business and separate software business at the start of last year, the latter under the Conduent name. Xerox has since introduced an array of office printers and has bolstered its network of dealers in North America. In production printing, it has added additional spot colours to the iGen5, but despite this has suffered declining sales, falling 10% in the most recent quarter compared to that in 2016.
Its inkjet arm remains in the start up phase with Brenva sheetfed and Trivor webfed machines. Fujifilm has likewise misfired in webfed inkjet, with a new higher quality machine understood to be in development. Its B2 sheetfed Jetpress 720S is by contrast relatively successful.
Fujifilm has a greater commitment to commercial printing with litho plates and workflow, large format inkjet and core inkjet printhead and inks technology, than Xerox. At the end of last year it announced plans to establish an Open Innovation Hub to explore nothing less than the Future of Printed Communications. It will aim to drive integration not only between the digital and litho world, but also with partners, with emerging technologies and with Xerox.
Fujifilm has declared its intention of making acquisitions using a $4.5 billion million cash pile to spend on acquisitions, mostly in medical technology to date. Xerox by contrast is under pressure from interventionist shareholder Carl Icahn who has built a 9.7% stake in the business and has called for a change in Xerox’s CEO to invigorate the Xerox share price.
The Xerox iGen5 is the latest version of its iGen press offering 2400dpi imaging and a fifth colour, but it has not stemmed a 10% decline in production print sales during 2017. This has added to pressure on the business which seems more focused on expanding its office printer range and distribution channels.
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