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Xerox becomes Fuji Xerox in cost-cutting move with Fujifilm

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Fujifilm and Xerox are taking existing industry collaboration to a new level. On Wednesday, January 31, Fujifilm and Xerox announced a move to combine efforts in the document solutions industry. Fujifilm will be a majority stakeholder in a newly combined company called Fuji Xerox. The move will allow the companies to reduce costs while expanding options through the merger of two different research and development teams.

Understanding just how the companies are working together is a bit of a brain teaser. Fuji Xerox Co. Ltd. (not to be confused with the new Fuji Xerox) is a joint venture by Fujifilm and Xerox created over 50 years ago. Fujifilm owns a 75 percent stake in that joint venture and Xerox, the remaining 25 percent. That Fujifilm Xerox Co. (not Fujifilm itself) is combining with the existing Xerox company, which will be renamed into Fuji Xerox. With all the Fuji Xeroxes being tossed around, the group is temporarily referring to the new venture as New Fuji Xerox.

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Fujifilm isn’t spending any actual cash on the change either — Fujifilm is selling all of its shares in that 75 percent of the existing Fuji Xerox and using that to buy a 50.1 percent share in the New Fuji Xerox.

While it may be a bit hard to follow how the transaction is happening — with multiple parts under the same Fuji Xerox name — the merger’s impact on consumers is a bit easier to make out. With the combination, the companies combined revenue, as they sit currently, makes the New Fuji Xerox a world leader out of all the document solution companies. The merger will also bring together their resources and technology, which Fujifilm says will help expand offerings from Fuji Xerox. That opens up possibilities for the new Fuji Xerox outside of the typical office, including industrial printing and commercial printing.

The combination also comes as office document focused companies are struggling with decreasing revenues as expanding digital tools leave lower demand for printing. Through the merger, the previous Fuji Xerox and Xerox will be able to reduce their costs to the tune of $1.7 billion dollars by 2022, with a majority of those savings taking place over the next two years. Some of that structural reform is through cutting what amounts to about a fifth of the workforce from the existing Fuji Xerox, or around 10,000 employees in the Asia Pacific region, according to CNBC.

Xerox becoming Fuji Xerox doesn’t necessarily that Xerox name will disappear — according to the announcement, the newly formed company plans to continue using the Fuji Xerox and Xerox brands in their current regions, with Fuji Xerox primarily in Asia and Xerox the more common name in the United States and Europe.

The deal is expected to be finalized this summer.

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