Xerox (NYSE: XRX) have announced their intention to propose a takeover offer to pc manufacturer HP (NYSE: HPQ).
This comes at no surprise after it was reported that Xerox had sold its 25% stake in Fuji Xerox, its partner firm with Fujifilm Holdings Corp (TYO: 4901).
The move to sell shares was so that further mergers could be financed, and the move to HP shows a statement of intent by Xerox.
The cash and stock offer comes at a premium to its market value of about $27 billion, as a it was reported on Tuesday morning.
Xerox have been quick to express their interest in HP, however there is no certainty that the deal will end in a merger.
Xerox had scrapped its $6.1 billion deal to merge with Fujifilm last year after lobbying by two of its main investors, Carl Icahn and Darwin Deason.
HP have been struggling to stimulate business following a slow quarterly update, and this move could be one that benefits both firms.
HP was once a pinnacle of American technology, but the rise of smart technology and the power of firms such as Apple (NASDAQ: AAPL) and Samsung (KRX: 005930) have taken business from HP.
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.
This is a bold move from Xerox, and clearly one which is driven by motivation to dominate the market.
In HP, Xerox will acquire a household established name with strong trading figures as back up over recent years.
As this deal only enters its initial phase, there is still much room for collapse.
Regulators will look at this deal and assess whether this will have a significant impact on competition, but subject to approval this could be a great snipe from Xerox.
Shares of HP have spiked 2.22% this morning, trading at $18 per share. 6/11/19 11:12BST.
