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Xerox Terminates Fujifilm Deal, Agrees to Settlement with Carl Icahn and Darwin Deason.


15 May 2018 - US-based imaging company Xerox (NYSE: XRX) has terminated a proposed combination with Japan-based Fujifilm, its JV partner in Fuji Xerox, and has entered into a new settlement agreement with investor Carl Icahn and Darwin Deason, the company said.

On 31 January, Xerox announced its plans to combine with Fuji Xerox, the joint venture Xerox and Fujifilm established in the US. This deal was to be worth USD 6.1bn.

However, this merely prompted a battle with activist investor Carl Icahn and businessman Darwin Deason.

Now, Xerox said the deal is being terminated in accordance with its terms due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by 15 April 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the subscription agreement and taking into account other circumstances limiting the ability of the company, Fujifilm and Fuji Xerox to consummate a transaction.

The settlement agreement with Carl Icahn and Darwin Deason resolves a pending proxy contest in connection with the company's 2018 annual meeting of Shareholders and Deason's litigation against Xerox and its directors. It does not affect any claims of Deason or other Xerox shareholders against Fujifilm for aiding and abetting.

Under the terms of the settlement agreement, Xerox appointed five new members to its board of directors: Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin.

Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the Xerox board of directors.

Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski each resigned from the board of directors of Xerox.

Jeff Jacobson resigned from his role as chief executive officer and as a member of the board of directors of Xerox.

Subsequent to joining the Xerox board of directors, Keith Cozza, the chief executive officer of Icahn Enterprises L.P., is expected to be appointed as the new chairman of the board of directors of Xerox, and John Visentin is expected to be appointed as the vice chairman and new chief executive officer of Xerox.

As part of the agreement, Xerox and Carl Icahn will withdraw their respective nominations of any other director candidates for election at the 2018 annual meeting of Shareholders.

Xerox will continue to waive the advance notice bylaw to enable any Xerox shareholder to provide notice of intent to nominate directors for election at the 2018 annual meeting of Shareholders until June 13, 2018. The 2018 annual meeting of Shareholders will be postponed to a later date.

The new board of directors plans to meet immediately and, among other things, begin a process to evaluate all strategic alternatives to maximise shareholder value.

Country: USA

Sector: IT/Online Services

Target: Xerox

Buyer: Fujifilm


Deal size in USD:

Type: Corporate Acquisition


Status: Terminated

Buyer advisor: , ,

Comment: Carl Icahn and businessman Darwin Deason win proxy war, kill deal
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Publication:M & A Navigator
Date:May 15, 2018
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