Xerox has agreed to purchase Lexmark for $1.5 billion, a significant move that will combine two major players in the printer industry. The deal requires approval from regulators in both the United States and China.
This acquisition would allow Xerox to bring manufacturing in-house, leveraging Lexmark's facilities, and expand its market share in Asia and Latin America, according to Xerox CEO Steven Bandrowczak. Xerox plans to fund the deal through a combination of cash and debt, and will reduce its annual dividend to help finance the acquisition.
Analysts believe the deal could improve Xerox's long-term profitability and cash flow by reducing sales, marketing, and real estate costs. Xerox anticipates annual savings of around $200 million through these consolidation efforts.
Lexmark, originally spun off from IBM in 1991, faced challenges as companies shifted towards digital practices. In 2016, Lexmark was acquired by a group of Asian investors for $3.6 billion. Despite its Asian ownership, Lexmark's board and leadership team remain US-based.
Xerox has previously attempted major acquisitions, including an unsuccessful bid to purchase HP in 2019. The Xerox-Lexmark deal is expected to be finalized by the second half of 2025, pending regulatory approval. While demand for printers is declining globally, this deal could help both companies adapt to the changing market and potentially expand their businesses.
It is interesting to note that while Xerox is primarily known for printers and copiers today, it was once a leader in the computing industry, with innovations like the graphical user interface (GUI), laser printers, and the computer mouse.
