Xerox Corp, under heavy pressure to find more revenue sources amidst the contracting demand for it copier and printer business, is holding talks over a possible deal with Fujifilm Holdings the camera maker based in Japan that might also include a change in control for Xerox, reported the Wall Street Journal.
Xerox, based in Norwalk, Connecticut has been targeted by Carl Icahn the activist investor as it has struggled to reinvent its business amidst a drop in demand in office printing.
Fujifilm is attempting to streamline its own copier business placing a bigger focus on its service of document solutions.
Xerox was the pioneer of photocopiers and it already has a five decade old joint venture based in Tokyo with Fuji that focuses on the region of Asia Pacific including China and Japan, leaving the rest of the world for Xerox to cover.
On Wednesday the WSJ report cited individuals who were familiar with this matter. It said as well that a full takeover of Xerox was not part of the deal.
Xerox would not comment about the possible negotiations while Fujifilm said it did not comment on speculation.
Xerox currently has a $7.7 billion market value, while the market value of Fujifilm is $22 billion.
Xerox is in need of new leadership due to being slow to launch different products and to increase its revenue, wrote Icahn in a letter to shareholders during December, just one day after he nominated four new members for the board. Icahn is the biggest shareholder of Xerox with a 9.7% stake.
In 2016, Xerox spun off the business process outsourcing part of its business and separated into a pair of independent companies that are publicly traded.
Shares of Fujifilm were down 1.8% in Japan following the report by the WSJ, while the broader market in Japan was down 0.3%.
The joint venture involving copiers known as Fuji Xerox was created during 1962 and now represents close to 50% of Fujifilm’s revenue and operating profit.
The Japan-based camera maker is seeking growth that is outside the shrinking photographic film business, increasing its drive for acquisitions in areas like regenerative medicine.
Prior deals include the purchase during 2015 of U.S. biotech firm Cellular Dynamics International that makes iPS or human-induced pluripotent stem cell lines as well as tissue cells.
In August of 2016, Fuji said its goal was to spend 500 billion yen or $4.49 billion in acquisitions over the upcoming three years.