Fujifilm sues Xerox for terminating merger

Fujifilm is suing Xerox for more than US$1bn plus damages, with accusations that the company abandoned the planned $6.1bn deal due to pressure from investors Carl Icahn and Darwin Deason.

Fujifilm placed a complaint with the US District Court in Manhattan, in addition to a declaration that that Xerox owes it $183m for dropping out of the amalgamation.

Xerox pulled out of the merger earlier this year after it asked Fujifilm for more money for 50.1 per cent of the business and was turned down.

[Related: Xerox pulls Fujifilm deal]

The two companies had announced earlier this year that Fuji Xerox, their 56-year-old joint venture, would combine with Xerox, with Fujifilm Holdings taking a 50.1 percent stake in the newly formed company, the New Fuji Xerox. The deal was meant to be part of a restructuring that, along with other reforms, would save the companies an estimated $1.7bn a year by 2022.

Icahn and Deason, who own 15 per cent of Xerox between them, had argued that the company had been undervalued, while Deason also accused Xerox’s former CEO Jeff Jacobson of arranging the deal to keep his job. The two billionaire investors entered a settlement deal with Xerox, where they called for Jacobson’s resignation and praised the company’s decision to pull out of the deal.

Jacobson stepped down, with John Visentin replacing him. Visentin had been appointed to the role twice before, but the company changed its mind both times.

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