Jacobson: new Fuji Xerox to be 'dramatically stronger'

By Jo Francis, Thursday 01 February 2018

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Xerox chief executive Jeff Jacobson has stated that the combination of Xerox and Fuji Xerox will result in a business that is "dramatically stronger and more competitive" than the individual companies are currently.

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Combined company plans to target currently untapped markets

Speaking on a call with analysts and investors following yesterday's announcement that Fujifilm would acquire Xerox for $6.1bn (£4.3bn) and combine it with Fuji Xerox to create a new $18bn turnover giant, Jacobson said: "I strongly believe this is the best step forward for Xerox. The transaction creates a combined company that will be dramatically stronger and more competitive than either company is on a standalone basis." 

Jacobson, who will become chief executive of the 'new' Fuji Xerox if the deal is approved, said the businesses were currently constrained by the terms of the current joint venture agreement which included having separate product portfolios, R&D roadmaps, and supply chains.  

"Combining the IP strengths and world-class R&D capabilities of the two companies will drive innovation in areas that customers are most focused on and which will address future demand," he stated.  

"If you were to look at inkjet as an example, right now we have separate strategies for Fuji Xerox on inkjet, Fujifilm on inkjet, Xerox on inkjet. And Fujifilm has tremendous IP in the areas of inkjet heads, certainly ink capabilities as well, and we'll be able to leverage those." 

He highlighted the potential to accelerate inkjet developments, and target currently untapped markets such as industrial printing. Other benefits would include supply chain efficiencies and an ability to "sweat the manufacturing assets" more effectively, as well as moves such as adopting a common printer controller rather than using separate frontends. 

He added: "We will have a total market opportunity that is currently estimated at $120bn, with an additional $100bn future opportunity in adjacent markets in industrial print, leveraging our combined technologies." 

Jacobson said that part of the negotiations had involved discussions with Fujifilm chairman and chief executive Shigetaka Komori about how to combine and "unleash" the best technologies and R&D know-how from all three companies, although he said some of those plans would have to remain confidential during the integration phase.  

Komori famously transformed Fujifilm in the face of huge decline in what had been its core photographic business, and wrote a book Innovating Out of Crisis: How Fujifilm Survived (and Thrived) As Its Core Business Was Vanishing, detailing his experiences.  

A Fujifilm spokesperson has also expanded upon the position regarding Fujifilm's separate Graphic Systems business, which is not included in the deal. 

"In the future nothing is decided about integrating the organisations. It is something we will consider going forward," the spokesperson told PrintWeek.  

"Fujifilm’s Graphic Systems business has been collaborating with Fuji Xerox and Xerox, in the sales of POD machines and continuous feed printers. Recently, the collaboration has been expanding, for example selling Fujifilm’s Jet Press inkjet digital press through the Xerox Corporation channel. We will continue to collaborate with the new Fuji Xerox." 

Xerox currently sells the Jet Press in North America and Canada. 

Separately, activist Xerox investor Carl Icahn, who has been extremely critical of Xerox's strategy and leadership team, has not yet commented publicly on yesterday's announcement.  

Jacobson said he had not spoken to Icahn about the deal.  

Shares in Fujifilm rose by 14% after financial markets digested the announcements, while shares in Xerox have risen to a 52-week high.  

 

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