The US financial newspaper Wall Street Journal has published a report according to which Xerox is considering the possibility of making an offer for the acquisition of HP, with a purchase proposal in cash and shares. The proposal would have already been brought to the table of the board of directors that would have discussed it in recent days.
HP currently has a market capitalization of 27.5 billion dollars (we're talking about HP Inc., HPQ title on the NYSE), which is more than three times more than Xerox, which capitalizes just over $ 8 billion. According to the Journal sources, Xerox has already received the promise to support a prominent banking institution willing to finance the operation.
The operation of which the value is ignored, but which obviously provide for a premium offer with respect to the current value of HP Inc. and which apparently will be composed in the form, as mentioned, of mixed cash / share purchase. The transaction would also be partly financed by the sale of the 25% shareholding, which Xerox holds in the Fujifilm-Xerox joint venture and which should yield approximately 2.3 billion dollars.
An agreement would unite two great names of the past, both in difficulty in reorganizing their activities especially in the face of the decline in the demand for printing solutions due to less need for paper documents. Both companies are going through a phase where the priority is cost control, and just in recent days the new CEO of HP, Enrique Lores (replaced Dion Weisler, who had announced his retirement for health reasons in the past few weeks) explained a restructuring plan that envisages a reduction of around 16% in personnel (some 9,000 jobs) by 2023. The operation of acquisition – which would actually be more of a merger – would allow both companies to save around $ 2 billion a year.
Finally, for the sake of completeness, let us remember that HP Inc. is the company that currently operates in the market of printers (including 3D), laptops and desktop systems, after the division operated in 2015 and which led to the creation of Hewlett Packard Enterprise (HPE title at the NYSE), focused on the world of servers, storage and services for businesses and companies.
Currently there is still no certainty that Xerox decides to make a formal proposal, or that it will be accepted by HP: we'll see.