Relations Between Fujifilm and Xerox Are Breaking Down

Fujifilm is trying to force their merger with Xerox or collect damages, which is causing relations to sour between the two companies. Market insider published part of a letter between Vice Chairman and CEO John Visentin and Fujifilm’s Chairman Shigetaka Komori responding to the lawsuit filed by Fujifilm stating:

“Fujifilm should realize that the internal accounting issues at Fuji Xerox were a result of their mismanagement, which made it impossible to close the announced transaction,” said Visentin. “We cannot stand by and let them further harm our iconic brand. The lawsuit is nothing more than a desperate and misguided negotiating ploy to save their takeover attempt, which to this day remains enjoined by order of the New York State Supreme Court, and could take our focus away from serving our customers.”

“Our focus is on running the business in the service of our thousands of customers and partners and delivering exceptional value through market-leading services, products and delivery capabilities,” added Visentin.

“Fujifilm’s actions have forced us to move forward on several fronts to protect our supply chain. First, we will start, in a material way, to source products from new vendors. Second, we will build partnerships with companies that are aligned with the Xerox mission to provide world-class technology and solutions. Third, we currently believe Xerox will be much better served by not renewing our Technology Agreement with Fuji Xerox when it expires. We will detail for our shareholders the enormous opportunity for Xerox to sell products directly into the growing Asia-Pacific market with sole and exclusive use of the valuable Xerox name, and a more efficient, better managed supply chain than exists with Fuji Xerox today.”

“Xerox is a proven technology innovator and an exceptionally resilient company; we remain steadfastly focused on creating shareholder value through our renowned innovation capabilities, globally recognized brand, and leading market presence.”

Unfortunately, the deterioration of the relationship could affect Fujifilm’s long-term bottom line because Xerox is threatening to not renew their partnership in 2021 when it expires according to multiple sites (1, 2, …). The lose of their lucrative partnership could cost a lot more than the $1 billion that they are currently suing Xerox for. If Xerox terminated their partnership they would most likely have to start producing their products again independently and it’s unclear how successful of a move this would be. In the meantime, Xerox stock continues to fall in price.

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