Carl Icahn and Darwin Deason push Xerox to explore its options vis-a-vis its joint venture Fuji

Both investors are pushing Xerox to explore options vis-a-vis its joint venture with Fujifilm which includes renegotiation of terms of the JV or to walk away from it. Incidentally, 50% of Fujifilm Holdings Corp’s overall operating profit stem from this joint venture.

As per a report by the Wall Street Journal, Carl Icahn and Darwin Deason, the biggest and the third-biggest shareholders of Xerox Corp respectively, plan to jointly push the photocopier and printer maker to explore options, which includes a divestiture.

The two investors, who together own 15.7% of Xerox had earlier called separately on the firm to either renegotiate or break off talks with its joint venture partner Fujifilm Holdings Corp, since they deem the agreement to be unfavorable for Xerox.

Icahn has also called for the replacement of Jeff Jacobson, Xerox’s CEO.

“The Xerox Board of Directors and management are confident with the strategic direction in which the Company is heading and we will continue to take action to achieve our common goal of creating value for all Xerox shareholders” said Xerox in a statement.

Deason has been asking Xerox to make public the terms of its joint venture agreement with Fujifilm, which he termed as being “one-sided”.

Xerox has described Deason’s comments as being “false and misleading”.

The 50 year old joint venture, with Fujifilm holding 75% and the remainder 25% being held by Xerox, is a pillar of Fujifilm’s business and accounts for around 50% of the group’s overall operating profit.

The joint venture has limited prospects for future growth since there is a declining demand for office printing.

As of March 2016, Fuji Xerox, the joint venture between the two, reported an operating profit of $750 million on sales of $10 billion.

Fujifilm declined to comment on the Journal report.

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