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Industry

Xerox in bid talks with HP

Earlier this month, The Wall Street Journal released claims that Xerox and HP are in talks about a potential merger or buy-out. However, HP has since spoken out on the topic and plans have been put on hold for the time being.

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The HP logo at the entrance to its Silicon Valley site

Described as “an audacious move that would unite two fading stars of technology”, by the publication, The Wall Street Journal describes how Xerox is in talks with HP about making a $27bn (£21bn) cash-and-stock offer for HP.

Founded in around 1946, Xerox has grown from selling photocopying machines to an American global corporation which sells print and digital document products in over 150 countries.

HP, formerly known as the Hewlett-Packard Company, was founded in 1939 in California, US as a multinational information technology. In 2015, HP split from servers and data storage seller, Hewlett Packard Enterprise.

Both brands have since grown at a rapid rate however the uncertain nature of the print industry and a move towards digitalisation has affected both companies over the years.

In HP’s 2020 financial outlook and restructuring strategy, it announced plans to cut up to 9,000 jobs globally by 2023. In October 2018, Xerox also cut around 900 jobs.

In response to media reports of the proposed business move, HP issued a statement. It reads: “As received at HP’s most recent Securities Analyst Meeting, we have great confidence in our multi-year strategy and our ability to position the company for continued success in an evolving industry, particularly given the multiple levers available to drive value creation.

We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders

“Against this backdrop, we have had conversations with Xerox Holdings Corporation from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction. Most recently, we received a proposal transmitted yesterday.

“We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders.”

However, more recent reports have shown that HP has put the talks on hold for the time being. In a letter quoted by Australian news outlet, CRN, issued by HP chief executive officer and board chair, Chip Bergh, to Xerox vice chairman and chief executive officer, John Visentin, the firm describes how it feels the offer "significantly undervalues" HP.

However, HP has not written off a deal as Bergh credits the potential benefits of consolidation, and states that the company is open to exploring potential value through the potential combination with Xerox.

If you have any news, please email carys@linkpublishing.co.uk or join in with the conversation on Twitter and LinkedIn.


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