Xerox Corp (NYSE:XRX) stock was soaring today on news that it is being taken over by Fujifilm.
The deal will have Xerox Corp combining with its Fujifilm joint venture: Fuji Xerox. The merger will result in $1.7 billion in cost savings. The company will achieve $1.2 billion of these cost savings by 2020.
Xerox Corp notes that the deal with Fujifilm will include a special cash dividend of $9.80 per share for its investors. The total value of this dividend is $2.5 billion. Once the takeover is complete, holders of XRX stock will control 49.9% of the new company. The remaining 50.1% will belong to Fujifilm.
Xerox Corp points out that the deal will have the company running with dual headquarters. These locations will be in Norwalk, Conn., and Minato, Tokyo. The company will also continue to use its current names, Xerox and Fuji Xerox, when operating in those local regions.
According to Xerox Corp, the deal between the two companies will benefit its own shareholders. It says this will be due to the larger global reach of it and an improved financial profile. It also notes that the new company will generate $18 billion in yearly revenue.
The news of Xerox Corp combining with Fuji Xerox comes at the same time as its fourth quarter earnings report for 2017. In this earnings report, the company saw earnings per share of $1.04 on revenue of $2.75 billion. This is also likely helping XRX stock today by beating out Wall Street’s earnings per share and revenue estimates of 96 cents and $2.65 billion.
XRX stock was up 6% as of Wednesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.
