Xerox is preparing a shock bid for HP in what could be one of the most surprising takeover deals in recent years.
According to the Wall Street Journal, the company is launching an audacious offer for its fellow printing giant as it looks to stake its claim to still be a technology powerhouse.
Should any deal actually take place, it would consist of both cash and stock, although there's no indication yet of the deal’s potential value.
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Backing
Xerox is reportedly backed by a "major" bank, the WSJ claims, but the company is still far smaller in size that HP. Recent estimates have Xerox worth approximately $8 billion, while HP’s worth is estimated to be around $24 billion.
Despite these differences, there are some signs that the deal may make good business sense for both parties.
As the demand for psychical printing diminishes year-on-year, both Xerox and HP are struggling to reinvent themselves and cut costs, with the WSJ estimating that a deal could see both parties saving $2 billion.
Xerox, which is still bets known for its enterprise printers and copying machines, has an annual revenue of approximately $10 billion.
HP, which was spun off from HPE in 2015, is best known as one of the largest PC makers in the world, with revenues of more than $58 billion for the last year, as well as dealing in smaller printers and printing supplies.
Last month, the company cut its workforce by 15 per cent, laying off as many as 9,000 people in the process to save approximately $1 billion in expenses.
Xerox may be funding part of the deal via the sale of its joint venture with Fujifilm, which itself had been considering a bid for Xerox. The company revealed today it has sold its 25 percent stake to the Japanese firm for $2.3bn, which could well go towards any bid for HP.
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