Thu, Nov 07, 2019 - Page 10 News List

Xerox considering takeover offer for HP, report says

Bloomberg

An HP logo is displayed in front of the office complex on Oct. 4 in Palo Alto, California.

Photo: AFP

Xerox Holdings Corp is considering a cash-stock offer for the US$27 billion PC giant HP Inc, the Wall Street Journal (WSJ) reported, a deal that could combine two of the biggest US names in office hardware.

Xerox’s board of directors met on Tuesday to deliberate a deal that could result in US$2 billion of annual cost savings, the newspaper cited unidentified people as saying.

While there is no guarantee the company would follow through, any offer would value HP at a premium to its market value, the WSJ reported.

Representatives for the companies were not immediately available for comment after regular business hours.

Xerox, which a day before agreed to jettison a slice of a venture with Japan’s Fujifilm Holdings Corp for US$2.3 billion, might be angling to take over the world’s largest PC manufacturer after China’s Lenovo Group Ltd (聯想).

Any deal would buttress its share of the printing and copying market, which has been hard hit by the global move toward cloud computing and other Internet services.

It is unclear how Xerox — a name synonymous with the copying industry — intends to finance the acquisition of a company several times its market value.

Xerox has already secured an informal funding commitment from a major bank, the WSJ reported, on top of proceeds from the sale of its stake in Fuji Xerox.

HP, once an icon of US technological innovation, is struggling in a plateauing PC market with the advent of smartphones.

The company, which appointed a new CEO just last month, aims to slash as much as 16 percent of its work force as part of a restructuring meant to cut costs and boost sales growth amid its first change in top leadership in four years.

HP’s printing business, a major source of profit, has seen falling sales and recently was dubbed a “melting ice cube” by analysts at Sanford C. Bernstein.

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