Fujifilm sues Xerox for well over $1 billion after aborted merger

Published on: 19 Jun, 2018

Fujifilm Holdings Corp. sued Xerox Corp (NYSE: XRX) for over $1 billion, blaming the company for giving in to pressure from activist investors, Carl Icahn and Darwin Deason, for ending a planned merger. According to a complaint filed with the U.S. District Court in Manhattan, Fujifilm accused Xerox for breaking a contract and engaging in “international and egregious conduct” in ending the $6.1 billion merger.

Carl Icahn and Darwin Deason together own 15% of Xerox shares, and claimed the merger devalued the company. However, Fujifilm states “It is inconsistent with shareholder democracy to allow Carl Icahn and Darwin Deason, minority shareholders with only 15% of Xerox’s shares, to dictate the fate of Xerox.” Xerox argued that another reason they ended the merger was because of unresolved accounting issues.

This merger would have united Xerox with the 56-year-old joint venture Fujifilm Xerox, in which Fujifilm and Xerox would have had stakes of 75% and 25%, respectively. Afterwards, Fujifilm would have owned 50.1% of Xerox’s common stock, and Xerox shareholders would have received a $2.5 billion special dividend. Fujifilm had hoped from the merger that it would deliver at least $1.7 billion of cost savings and $1 billion of new revenue annually. This lawsuit would take punishing damages and a $183 million merger termination fee. Fujifilm claims “Xerox recently has been subjected to the whims of activist investors Carl Icahn ands Darwin Deason, who, notwithstanding their minority ownership of Xerox shares, have yanked the Xerox Board in more directions than can be counted.” Deason, who accused Jeff Jacobson, the chief executive of Xerox, of organizing the merger just to keep his job, is currently chasing a lawsuit accusing Fujifilm of aiding and assisting violations of trustworthy duty by Xerox’s old board.

Ratings

Ratings
  • 1880Views
  • 0Comments

Recommend to Friends

  • facebook
  • Twitter
  • google plus
  • pinterest
  • Digg
  • stumbleupon
  • Reddit
  • linkedin

William Kim

Email: William@financialinsiders.com

@Newsletter

Sign Up for Weekly Updates

Opt-into our eNewsletter NOW! For the Latest Trending Financial News Topics in Cannabis, Tech, Biotechs, Precious Metals, Energy, Renewable Energy and much more!

Related Posts

22 Jun, 2017 4460
26 Jun, 2017 5545
14 Jul, 2017 2715
26 Jul, 2017 3490

Comments

There is no comment on this article