Xerox is reportedly considering purchasing computer and printer maker HP Inc. as part of a cash-and-stock deal that would bring together two tech giants of yesteryear.
Update (11/7): HP Inc. has confirmed that Xerox Holdings has made a takeover offer for a "potential business combination."
What's interesting is that Xerox's market capitalization is about $8 billion, while HP Inc.'s is over $27 billion. Citigroup would reportedly provide financing to Xerox to swallow up the much bigger HP operation. It should be noted that Hewlett-Packard split into two publicly traded companies a few years ago: Hewlett Packard Enterprise (HPE) sells servers, software, storage, networking and associated services, while HP Inc. is dedicated to printers and PCs.
The original story follows below
Sources familiar with the matter told The Wall Street Journal that Xerox’s board discussed the matter during a meeting on Tuesday. The Journal said there is no guarantee that Xerox will follow through with an offer or that it would succeed although CNBC is reporting that Xerox has already put an offer on the table.
Share value in HP Inc. is up 11.58 percent on the news while Xerox stock is trading up 1.54 percent as of writing.
Of interest is the fact that HP Inc. is a much larger venture than Xerox with a market cap of around $30 billion compared to Xerox’s $8.2 billion cap. Also of note is the fact that HP Inc. CEO Dion Weisler stepped down from his helm in August to tend to an unspecified family health matter.
Xerox is expecting to bring in roughly $2.3 billion from the sale of stakes in joint ventures with Fujifilm Holdings Corp. Sources also say the copier maker has secured an informal funding commitment from a major bank to cover the rest of the deal.
According to the Journal, the two businesses could save about $2 billion through layoffs and other synergies.
Image credit: Photocopier by Eakrin Rasadonyindee