Xerox has agreed to purchase Lexmark in a $1.5 billion deal, combining two leading brands in the printer industry. The acquisition, subject to approval from US and Chinese regulators, will enable Xerox to shift production to Lexmark's facilities and expand its presence in Asia and Latin America. The company will finance the purchase through a combination of cash and debt, and will slash dividends to 50 cents per share from $1.
According to Xerox CEO Steve Bandrowczak, the synergies from the merger will help reduce costs and increase profitability, with the company expected to save up to $200 million per year. In contrast to Lexmark's previous turbulent times, when it was acquired by Chinese company Apex Technology, this deal promises stability.
Despite the declining demand for printers, this acquisition may help both companies adapt to changes in the market.