According to a article of the Wall Street Journal (WSJ), Xerox has made a takeover bid to HP. The offer, which has since been confirmed by HP, provides for the takeover of the group for 33 billion US dollars. The two companies are currently in negotiations. HP has already stated that it is “acting in the interests of the shareholders”, which means that a takeover cannot be ruled out in principle. Xerox’s market capitalization is currently around $8 billion, so HP’s market capitalization is more than three times $29 billion.
In the event of a possible takeover, Xerox would pay part of the purchase price in cash, but a large proportion would be paid by shares in the merged company. WSJ sources report that a major bank has already made an informal financial commitment to Xerox for the billion dollar deal. A sale of shares in a joint venture with Fujifilm, in which Xerox currently owns 25 percent, would add an additional $2.3 billion to Xerox’s cash position if it were sold at its current market capitalization.
According to analysts, the merger of the two competitors would mean annual cost savings of around two billion US dollars for Xerox. The sale would “only” affect HP Inc., which, along with HP Enterprises (HPE), arose from the split of Hewlett Packard. Xerox would therefore only swallow the printers and PC business in the event of a takeover, while server and software would continue to be distributed by HPE. In response to takeover rumors, Xerox’s market capitalization rose by 3.5 percent. HP Inc. stock gained six percent.