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August 19, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Fujifilm sues Xerox for $1B over scuttled acquisition

The percolating drama between Xerox Corp. and Fujifilm Holdings has boiled over as the Japanese company filed a $1 billion lawsuit against Xerox for terminating their $6.1 billion acquisition deal.

In its lawsuit, Fujifilm pointedly blamed Xerox shareholders Carl Icahn and Darwin Deason as the culprits in forcing the Norwalk-headquartered company to abort the acquisition.

“This change of heart is undoubtedly due to external pressures,” Fujifilm said in the complaint filed in U.S. District Court in New York. “Xerox has recently been subject to the whims of activist investors Carl Icahn and Darwin Deason, who, notwithstanding their minority ownership of Xerox shares, have yanked the Xerox board in more directions than can be counted.”

Fujifilm’s complaint also insisted that it was “inconsistent with shareholder democracy to allow Carl Icahn and Darwin Deason … to dictate the fate of Xerox.” The Fujifilm lawsuit claimed the acquisition would have generated “billions of dollars in synergies,” adding that it was “value-enhancing for Fujifilm’s shareholders and, thus, Fujifilm is compelled to take steps to protect its rights.”

Fujifilm first announced its plans for a lawsuit in late May. However, two weeks ago, CEO Shigetaka Komori stated that he was willing to wait until the end of the year before admitting the terminated deal could not be revived. “I’m not going to wait forever,” he had said during a press conference in Tokyo. “I don’t have a specific deadline in mind, but it should normally be around six months. If we have nothing by then, it can’t be helped.”

Xerox responded to the lawsuit with a statement promising to “vigorously defend its decision and pursue any and all remedies available to Xerox arising from Fujifilm’s mismanagement and misconduct.”