The reputable business publication The Wall Street Journal has released the information on Xerox Holdings’ plans to purchase HP Inc. The future deal seems to be unusual because the capitalization of the potential buyer is three times less than that of the company being bought (HP capitalization amounts $ 27 billion).
It became known that the company’s board of directors had discussed the deal in early October. It was not possible to hide the fact that Xerox was going to pay for the purchase more money than the market suggested. Moreover, they will pay in cash and stock.
Where will the funds come from? Xerox expects to receive $ 2.3 billion from the stock sale in joint ventures with Fujifilm. In addition, we have got a word from the insiders that there was a preliminary investment agreement on the part of a large bank.
The modern world dictates its own rules; the demand for printing something on paper is constantly decreasing. The deal can help two reputable companies change the way they earn their living and save on costs of about $ 2 billion.
Xerox specializes (annual revenue of $ 10 billion) in the production of printers and copy machines. HP (annual revenue of $ 58 billion) is focused on the production of small printers and consumables for them. It has also proved to be one of the world’s largest PC manufacturers.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group