Xerox to Acquire Lexmark International

Investing.com — Xerox (NASDAQ:XRX), a well-known office equipment manufacturer, plans to acquire Lexmark International, a printer and printing software maker, in a $1.5 billion deal.

Lexmark International, which originated from IBM (NYSE:IBM) in 1991, was sold to a consortium of Chinese investors for $3.6 billion in 2016. This consortium included Ninestar Corp, PAG Asia Capital, and Shanghai Shouda Investment Centre. With this acquisition, Lexmark will return to U.S. ownership.

Xerox has been struggling with a decline in revenue over the past five quarters, primarily due to a decreased demand for printers and related equipment as the digital era progresses. The company faces strong competition from major players like HP (NYSE:HPQ) and Canon. Xerox's shares have fallen more than 50% this year, although they were trading nearly 5% higher before the market opened on Monday.

By acquiring Lexmark, including its debt, Xerox aims to gain the scale necessary to compete more effectively in the market. The merged entity is expected to serve over 200,000 clients across 170 countries and rank among the top five firms globally in various print segments.

This deal will also help Xerox expand its presence in the Asia-Pacific region and enhance its ability to serve customers in the growing A4 segment. The A4 segment encompasses smaller-format printers and copiers commonly used in homes and offices.

Xerox intends to finance the acquisition, expected to close in the second half of 2025, through a combination of cash on hand and debt financing. To help reduce debt levels, Xerox is decreasing its annual dividend from $1 to 50 cents per share, starting with the dividend anticipated to be declared in the first quarter of 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.