Investing.com — Xerox (NASDAQ:XRX), a well-known office equipment manufacturer,
will acquire Lexmark International, a printer and printing software maker currently owned by China in a $1.5 billion deal, the companies announced on Monday.
Lexmark International, which originated from IBM (NYSE:IBM) in 1991, was sold to a consortium of Chinese investors for $3.6 billion in 2016. The consortium included Ninestar Corp, PAG Asia Capital, and Shanghai Shouda Investment Centre. With this acquisition, Lexmark will return to U.S. ownership.
Xerox has been grappling with a decrease in revenue for five consecutive quarters due to a decline in demand for printers and related equipment in the digital era.
The company also faces stiff competition from other industry giants such as HP (NYSE:HPQ) and Canon. Xerox’s shares have dropped more than 50% this year, but were trading nearly 5% higher before the market opened on Monday.
Acquiring Lexmark, including its debt, will give Xerox the much-needed scale to compete more effectively.
The merged company is projected to serve over 200,000 clients in 170 countries and hold a market share among the top five firms globally in various print segments.
The deal will also enable Xerox to grow its presence in the Asia-Pacific region and strengthen its capacity to reach customers in the growing A4 segment. The A4 segment includes smaller-format printers and copiers frequently used in homes and offices.
Xerox plans to finance the acquisition, which is expected to be finalized in the second half of 2025, through a mix of cash on hand and debt financing.
To aid in reducing debt, Xerox is cutting its annual dividend to 50 cents per share from $1, starting with the dividend anticipated to be declared in the first quarter of 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.