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Xerox buying HP? Report of $27bn takeover bid surfaces

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Xerox may have its eyes on a far bigger rival than itself. The $8bn printing services company is considering a takeover of personal computer giant HP, according to The Wall Street Journal.

With a market value of $27bn, HP is about three times the size of Xerox, which also makes printers and copiers, making the move an audacious one if it were to go though. 

The WSJ report, citing unidentified sources, said Xerox’s board met on Tuesday to consider a cash-and-stock offer at a premium to HP’s market value. By merging, the companies could save $2bn in annual costs. 

The WSJ also reported that Xerox has received an informal funding commitment from a major bank. 

Yesterday, Xerox announced it was selling its 25% stake in the decades-old Fuji-Xerox joint-venture partnership that sells document-related products and services in the Asia-Pacific region.

The $2.3bn proceeds from the sale could further contribute to financing Xerox’s reported offer for HP.

And HP spokesperson said: “HP does not comment on rumors or speculation”. Xerox has not replied to a request for comment at the time of writing.

The reported news come a year after Xerox abandoned a controversial $6.1bn deal to merge with Fujifilm last year, after investors Carl Icahn and Darwin Deason lobbied against the agreement, claiming that it undervalued the firm

Palo Alto-based HP has for its part been facing a challenging market in recent years, as well as sudden changes of leadership. 

Last August, its CEO Dion Weisler announced he was leaving the company for personal reasons, and was replaced by the head of its printing business Enrique Lores.

HP’s fiscal results in Q3 2019 showed a 5% year-over-year drop in its printing revenue. And last month, it said that it will cut up to 9,000 staff globally, starting in 2020, as part of a company restructure

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