Episode 5- Fujifilm to sue Xerox to enforce acquisition agreement

Kenji Sukeno, chief operating officer of Fujifilm Holdings Corp

In January 2018, Xerox and Fujifilm had agreed to merge Xerox and Fujifilm in a joint venture Fuji-Xerox and give Fujifilm control. However, activist investors Carl Icahn and Darwin Deason challenged the agreement in court as Fujifilm failed to enter into negotiations on improved terms. The US courts have supported Icahn and Deason’s charges. Jeff Jacobson has resigned and new board members suggested by the two investors, who together represent about 13% of the company’s shareholding, have been appointed.

The complex deal has been scrapped and the latest information is that Fujifilm has decided to sue Xerox for scrapping the US$ 6.1 billion takeover deal. “We plan to file a damages lawsuit as soon as possible,” Kenji Sukeno, chief operating officer, said at an earnings briefing in Tokyo.

Sukeno plans to state through litigation that Xerox has no legal right to unilaterally terminate the deal and that the deal is in the best interests of Xerox shareholders. He also mentioned that he wants to explain to Xerox shareholders that the merger with Fujifilm is the only option for the American company to grow and have a future. A combined entity would be more efficient.

He also stated that Fujifilm will only consider the new proposals by the new Xerox board if they benefit Fujifilm shareholders. At the briefing, Sukeno said, “The contract that ties the two companies together is still valid.” He further added, “We will push for the legality of it. There was a legal contract that everyone agreed on, and after that a few shareholders wanted to put a stop to it.” Sukeno believes that there is no rush to close the deal as they are not bound by time.

However, in opposition to Sukeno’s ideas, Deason and Icahn said that the company is having conversations with several private equity firms about a potential deal. The two investors have indicated publicly that they would like to realize US$ 40 a share while the current price of Xerox shares has been hovering around US$ 30 per share and at close of trading on 18 May 2018 on the NYSE was US$ 28.19. Deason and Icahn have nevertheless admitted that cutting a new deal with Fujifilm Holdings Corp. could be “the very best thing to do.”

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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– Naresh Khanna

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