January

2018 kicked off with speculation in the Wall Street Journal that Xerox and Fujifilm could be striking “a major deal”. This marked the beginning of a back-and-forth business saga that lasted months and probably cost millions.

The speculation was true: Fujifilm was to acquire Xerox in a $6.1bn (£4.3bn) deal. Xerox would be combined with the two companies’ joint venture, Fuji Xerox, to create a new $18bn-turnover company. Xerox CEO Jeff Jacobson was to become CEO of the new Fuji Xerox organisation. Jacobson stated that the combination of Xerox and Fuji Xerox would result in a business that is “dramatically stronger and more competitive” than the individual companies are currently.

February

So far so good. However, a pair of uppity Xerox stakeholders – and major shareholders – Carl Icahn and Darwin Deason denounced the deal, claiming it “undervalues Xerox and disproportionately favours Fuji” – a claim countered by both Xerox and Fujifilm. Deason filed a lawsuit, citing “fraud and breaches of fiduciary duties”, intended to block the deal, which Xerox described as “without merit”. 

April

Icahn and Deason then urged the Xerox board to explore the potential for a better deal – such as selling to a rival – claiming that “Fuji needs Xerox so much more than Xerox needs Fuji”. The pair’s campaign initially appeared to be bearing fruit – Xerox asked to renegotiate the deal currently on the table. Deason then filed an amended lawsuit, which resulted in a US court putting a temporary block on the sale. 

May

Then Xerox chief executive Jeff Jacobson agreed a settlement that would see him and six other board members resign. This marked a substantial victory for Deason and Icahn, but it put both the deal and the joint venture itself under huge pressure. Two days later, however, and everything has changed again. The settlement, which also required that Deason cease his legal action, expired. Xerox said Deason had failed to abide by it, Deason and Icahn disagreed furiously, but Jacobson and the other board members remained in place. The Xerox board then launched an appeal against the court order that had halted the sale, provoking further ire from Deason and Icahn.

The Xerox board then attempted to put the whole business behind them, publishing an open letter to shareholders in response to what it described as “false and highly irresponsible fearmongering” by Carl Icahn. But less than a week later, the Xerox board appeared to have capitulated: the deal was off and Jacobson was to be replaced.

June

Now it was Fuji’s time for action. The company refused to give up on the deal and filed new papers at the New York State Supreme Court describing the settlement agreed between Deason and Icahn, and a number of now former Xerox board members, as a “self-serving, self-interested settlement”.

Fuji claimed that Xerox had failed to pay a breakup fee, thought to be $183m, a key element of the cancellation process. Fuji filed a $1bn suit against Xerox for damages over the deal’s collapse.

Back to Xerox, which responded by saying it would take its ball home if the other boys were not going to play nicely, threatening to not renew its technology agreement with Fuji Xerox and replace products in its portfolio developed under the joint venture. 

July

The boss of Fuji Xerox, Kouichi Tamai, responded by saying he believed that breaking up the long-standing joint venture would not be a viable option for Xerox. He said: “It is my responsibility to convince Xerox that it is cheaper and more reasonable to source products from us.”

New Xerox CEO John Visentin attempted to steady the ship. He quashed talk of there being an auction process underway to sell Xerox, following the collapse of the takeover deal, but reiterated that Xerox does not currently plan to renew its Technology Agreement with Fujifilm, which expires in 2021. 

October 

Things remained quiet for a couple of months until, after a four-month hiatus, a New York State judge ruled in Fujifilm’s favour and reversed the injunction blocking the deal, reviving the possibility of the deal happening.

What will happen remains unclear. According to a report in the Nikkei Asian Review, Fujifilm boss Shigetaka Komori will make a decision by the end of the year about whether to pursue the deal.

Watch this space...