January 29, 2016 – Rochester, NY – Xerox will separate into two companies, a $11 billion document technology company and a $7 billion business services company, the office equipment maker announced Friday.
The transaction into two independent publicly-traded companies is expected to be complete by the end of the year. Xerox also announced a three-year restructuring program expected to save $2.4 billion.
“Today Xerox is taking further affirmative steps to drive shareholder value by announcing it will separate into two strong, independent, publicly traded companies,” said Chairman and CEO Ursula Burns in a statement. “These two companies will be well positioned to lead in their respective rapidly evolving markets and capitalize on the opportunities that now exist to expand margins and increase market share.”
Billionaire investor Carl Icahn will have a continuing part to play in the separation. He will name three members to the board of the business services company and can also select someone to observe and advise the search for a CEO of that company. The split, Icahn said, would result in “an independent (business process outsourcing) company with fresh, focused leadership and best-in-class corporate governance will greatly enhance shareholder value, and we are proud to be a part of that process.”
Xerox hopes to complete the split by the end of the year. As for her role, she said that discussion is “purposefully … off the table,” she told Bloomberg TV. “The decision-making process has to be about the business. Once we decide, which we have, now myself and the board, I’ll come forward with recommendations about leadership and we’ll start having that discussion.”
The split essentially would unravel the company’s purchase of Affiliated Computer Services Inc. in 2010 for $5.6 billion. The company employs more than 140,000 worldwide. After the split, about 104,000 employees will be part of the outsourcing company. The document technology company will be made up of the other 40,000 including most of 6,500 Xerox employees in the Rochester area.
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