Xerox wants to acquire Lexmark for $1.5 billion

Key information

• Xerox aims to acquire Lexmark for a total sum of $1.5 billion.
• The acquisition encompasses all of Lexmark's assets and liabilities and is intended to strengthen Xerox's position in specific market segments.
• Xerox expects the acquisition of Lexmark to strengthen its core business and enable it to become one of the world's top five printer manufacturers.

Xerox intends to acquire its competitor Lexmark for a total amount of 1.5 billion dollars, in order to strengthen its position in certain market segments. The deal was reached between Xerox and current owners Ninestar and two Chinese investors, as the company announced Monday. This acquisition encompasses all of Lexmark's assets and liabilities.

Financial details and projects

Xerox plans to finance the deal through a combination of its own cash reserves and a loan. As part of the transaction, the annual dividend will be cut by approximately half to 50 cents per share. Xerox's board of directors unanimously approved the acquisition and its financing plan. The transaction is subject to approval by Ninestar shareholders and various regulatory bodies, and is expected to be completed in the second half of 2025.

Expected results and impact on the market

Xerox expects the Lexmark acquisition to strengthen its core business. These include expanding its presence in the growing A4 color printer market and improving its distribution network in Asia. The merger could allow Xerox to become one of the world's top five printer manufacturers. According to IDC, approximately 20 million printers were shipped worldwide in the third quarter of 2024, generating revenue of $9.4 billion. HP currently dominates the market with a 35 percent share, followed by Epson and Canon with around 21 percent each.

Context on Lexmark and Xerox strategy

Steve Bandrowczak, CEO of Xerox, noted that the acquisition will bring together two industry leaders with shared values, complementary strengths and a commitment to advancing the printing industry. Lexmark, headquartered in Lexington, Ky., was formed as a spinoff of IBM's printers, keyboards and typewriters division in 1991. The company was purchased by a Chinese consortium led by Ninestar (formerly Apex Technology) in 2016.

Xerox's restructuring plans

Xerox is currently undergoing restructuring and is aiming for a transformation. The company plans to cut 15 percent of its workforce in 2024. Plans for a hostile takeover of market leader HP were abandoned in spring 2020 with the onset of the coronavirus pandemic.

If you want access to all articles, subscribe here!