The Fujifilm-Xerox merger is off


Under the terms of the settlement, Chief Executive Officer Jeff Jacobson resigned from both his role as CEO and as a member of the board of directors of Xerox. John Visentin is expected to take over as CEO while Keith Cozza, the CEO of Icahn Enterprises, will become chairman.

The previously announced venture was terminated after Fujifilm failed to deliver the audited financials of Fuji Xerox by April 15, 2018. The settlement does resolve Deason's litigation against Xerox and its directors in terms of the proxy fight.

Earlier in January, IBM and Fujifilm announced the conclusion of the transaction, which involves the joining Xerox in the joint venture of the two companies, Fuji Xerox created more than half a century ago. Deason sued Xerox in February to block the proposal, accusing Jacobson of acting without authorization to strike a deal that preserved his job at shareholders' expense. They had criticised the U.S. company's chief executive and board for entering an agreement with Fujifilm that they said destroyed shareholder value. However, it said Fujifilm had "provided no assurance" that it could do so within what the board believed was an "acceptable" amount of time. He called it a new beginning. Fujifilm shares rose 1.5 percent.

Fuji Xerox, 75 percent owned by Fujifilm, handles contracts that supply global clients with Xeroxservices in the United States and Europe, and Fuji Xerox services in Asia. Toyama Chemical will be combined with its Fujifilm RI Pharma unit effective October 1, Fujifilm said in a statement Monday.

As previously reported, a year ago Fujifilm discovered accounting irregularities within two subsidiaries of its joint-venture Fuji Xerox Australia New Zealand operations. Bloomberg earlier reported on the deal's termination.

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While a new order at Xerox could lead to the business seeking a higher purchase offer, Fujifilm said it will investigate the move and potentially seek damages. Fujifilm has said it's appealing a USA court injunction blocking the takeover.

"We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm". Xerox says its new Board of Directors will now begin a process to "evaluate all strategic alternatives to maximize shareholder value".

"The transaction can not reasonably be expected to be completed under these circumstances, particularly given. the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox", the board said.

The activist investors have also said they are unhappy with the current structure of the joint venture, and settlement creates uncertainty concerning potential changes to a business that accounts for almost half of Fujifilm's revenue.

Icahn and Deason own 15% of the U.S. tech firm.