FUJIFILM Holdings Corporation (TSE:4901) signed an agreement to acquire 50.1% stake in Xerox Corporation (NYSE:XRX) for $6.2 billion on January 31, 2018. FUJIFILM Holdings will issue 75% stake of Fuji Xerox Co., Ltd. as consideration. As part of transaction, $2.5 billion will be paid as cash dividend by Xerox to existing Xerox shareholders, funded through arrangements made by Citigroup Global Markets Inc. and Morgan Stanley Senior Funding, Inc. On completion, the shareholders of Xerox will continue to own 49.9% stake in Xerox. Post completion, Fuji Xerox will become a 100% subsidiary of Xerox, and Xerox will change its name to “Fuji Xerox” (New Fuji Xerox). The combined company will trade on the NYSE under the ticker XRX. The combined company will maintain the “Fuji Xerox” and “Xerox” brands within its respective operating regions. Xerox Corporation will pay a termination fee of $183 million to FUJIFILM Holdings if the deal gets terminated. Post completion, Jeff Jacobson, Chief Executive Officer of Xerox, will serve as Chief Executive Officer of the New Fuji Xerox. The combined company's Board of Directors will include 12 members, seven of whom will be appointed by the Fujifilm Board. Five independent Directors will be appointed from the Xerox Board. Shigetaka Komori, Chairman and Chief Executive Officer of Fujifilm, will serve as Chairman of the Board. The New Fuji Xerox will have dual headquarters in Norwalk, CT, U.S. and in Minato, Tokyo, Japan.

The transaction is subject to the satisfaction of customary closing conditions including regulatory approvals, CFIUS approval, DSS/DOE approval, waiting period applicable to transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (or any extension thereof) being expired or terminated, Xerox filing with the New York Department of State the Charter Amendment, special dividend having been declared by Xerox, FUJIFILM delivering to Xerox, Fuji Xerox's audited financials, Fuji Xerox 2018 financials and any Fuji Xerox interim financials, and approval by Xerox's shareholders. The transaction has been unanimously approved by the Boards of Directors of both Fujifilm and Xerox. The Board of Xerox shall establish a Conflicts Committee consisting solely of Independent Directors that has, among other things, the power and authority of the Board with respect to reviewing the transaction.

As on April 11, 2018, Federal Trade Commission granted an early termination notice of antitrust approval waiting period. The transaction is expected to close in the second half of calendar year 2018. As of April 27, 2018, the transaction was temporarily blocked by a US court ruling, which ruled in favor of Xerox activist investors who are opposed to the deal. The merger is opposed by two of Xerox's top shareholders, Carl Icahn and Darwin Deason. As of May 4, 2018, Xerox appealed the court's ruling to block its deal with Fujifilm, saying the decision to approve the deal rests with the companies' shareholders and not the court. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Morgan Stanley & Co. LLC acted as financial advisors while Jeffery Bell, Gary M. Smith and Jeffrey Schrepfer of Morrison & Foerster LLP acted as legal advisors to Fujifilm. Centerview Partners LLC acted as financial advisor while Robert B. Schumer and Ariel J. Deckelbaum of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Xerox. Computershare and Innisfree M&A Inc. acted as transfer agent and proxy solicitor respectively, to Xerox Corporation. King & Spalding acted as legal advisor for Darwin Deason.

FUJIFILM Holdings Corporation (TSE:4901) cancelled the acquisition of 50.1% stake in Xerox Corporation (NYSE:XRX) on May 13, 2018. The transaction was terminated as Fujifilm failed to deliver the audited financials of Fuji Xerox by April 15, 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the subscription agreement and taking into account other circumstances limiting the ability of the Xerox, Fujifilm and Fuji Xerox to consummate a transaction. Thereafter, Xerox entered into a new settlement agreement with Carl Icahn and Darwin Deason, pursuant to which Xerox underwent following Board changes: Xerox appointed five new members to its Board of Directors: Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin. Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the Xerox Board of Directors. Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski each resigned from the Board of Directors of Xerox. Jeff Jacobson resigned from his role as Chief Executive Officer and as a member of the Board of Directors of Xerox. As of October 16, 2018, Fujifilm Holdings has won an appeal with a New York State Appellate Court overturning preliminary injunctions requested by activist investors that had blocked the merger. Following the New York State Appellate Court decision, Fujifilm intends to continue talks with Xerox to realize the merger.