The newspaper reported that the two companies are discussing “an array of possible deals”, although the likelihood of Fujifilm taking over Xerox in its entirety is considered to be remote. 

Xerox has recently been put under pressure from its largest individual shareholder, Carl Icahn, who has created waves by publicly calling for change at the company. Xerox chief executive Jeff Jacobson said the business was on track to achieve its objectives in its most recent financial results.

Fufjilm and Xerox have been co-owners of ¥1,081bn (£7.2bn) turnover joint venture Fuji Xerox, which sells into the Asia Pacific region, since 1962. Fujifilm is the majority shareholder after increasing its stake to 75% in 2001.

However, the partnership is likely to have been strained by the ramifications of an accounting irregularities scandal at Fuji Xerox’s New Zealand and Australia operations, which became public last year.

Xerox’s share of the ¥40bn accounting hit identified as a result of the probe is approximately $90m (£67m), and the group said it would re-state its accounts for 2014 through to 2016, and for Q1 2017 as a result.

One graphic arts industry expert commented: “I am sure they are having talks, but what might come out of it is pure speculation. Xerox always had the disadvantage of not being able to sell into Fuji Xerox territory. So product strategy, software, partnering, etc has always been disjointed. I also felt that the friction between Xerox and Fuji Xerox increased in recent years. So moving closer together makes sense,” he said.

“But I am not sure what would be in it for both companies in Fuji buying Xerox completely. In terms of market power and industry knowledge Xerox is still miles ahead of Fuji, so synergies would be limited – also controlling so much activity outside of Japan from Japan usually does not work that well.”

Last summer, Fujifilm Holdings unveiled a medium-term plan that set out its ambitions to grow overall sales to ¥2,600bn by the end of March 2020, together with a level of operating profit that would represent a record high, at ¥230bn. The group has also earmarked ¥500bn for strategic M&A investments.

Group turnover in Fujifilm’s most recent financial year was ¥2,322bn. Its Graphic Systems business, which is in a separate division to the Fuji Xerox Document Imaging wing, had sales of ¥255.8bn.

Xerox had sales of $10.8bn in its most recent financial year, and currently has a market capitalisation of $7.73bn. The company split into two businesses when it divested its business process services operations, which became standalone firm Conduent, at the end of 2016.

Xerox declined to comment on the report.