The inkjet printing industry has been a highlight in the printing arena for more than a decade. The press and consumables businesses remain pretty fragmented; conventional press manufacturers like Heidelberg (Fujifilm) are even making alliances and headway in the segment.

In April 2019, a huge move came when Electronics for Imaging (EFI) announced it would be acquired by an affiliate of Siris Capital Group for $1.7 billion. The acquisition, which was completed three months later, is thought to provide EFI with more resources to grow its press, ink and Fiery software businesses.

As large as this move is, this is pretty small compared to what has broken out on the inkjet front in the past few days, all centered around Xerox. It started on Nov. 5, 2019, when Xerox made a series of moves with FUJIFILM worth $2.3 billion.

The background is this: In 2018, the two companies had briefly flirted with FUJIFILM acquiring Xerox, but that fell through for a variety of reasons. The two companies did maintain their Fuji Xerox joint venture in the midst of a billion-dollar lawsuit that FUJIFILM filed after the merger was ended. The Nov. 5 announcement reported that Xerox sold its 25% stake in Fuji Xerox to a FUJIFILM subsidiary. It also modified sourcing terms to allow Xerox product supply continuity, and Xerox sold its 51% stake in Xerox International Partners, which develops print engines among other things, to an affiliate of FX. The billion-dollar lawsuit will go away.

One question that came to mind was what Xerox was planning to do with the money. An exclusive story in the Wall Street Journal the next day reported that Xerox was considering acquiring HP, a company with three times the market value.


HP has stated that it considers all offers it receives and made this announcement on Nov. 6:

“As reviewed at HP’s most recent Securities Analyst Meeting, we have great confidence in our multi-year strategy and our ability to position the company for continued success in an evolving industry, particularly given the multiple levers available to drive value creation.

Against this backdrop, we have had conversations with Xerox Holdings Corporation (NYSE: XRX) from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction. Most recently, we received a proposal transmitted yesterday. 

We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders.”

As for financing, Bloomberg reports that Citigroup will provide the financing if it goes through.

There’s a lot to consider here. Yes, the combination of Xerox and HP would create a powerhouse in the small office home office (SOHO) market and would combine a toner leader (Xerox) with an inkjet force (HP). I’m sure there are plenty of synergies as well.

However, as of Nov. 6, HP is valued at $30 billion, after its stock price rose as a result of the announcement. Xerox’s market value is just north of $8 billion. That is a lot of financing. There is also some question whether Xerox’s and HP’s segment of the printing industry is growing, and how HP’s personal computer part of the business fits in. It is uncertain whether this will happen.

If it comes to fruition, it’s a daring move. It certainly bears watching going forward. It is also a clear sign that changes are coming to the inkjet business.