Fujifilm Holdings Corporation has filed a litigation against Xerox Corporation in the U.S. district court at Manhattan claiming more than USD 1 billion in the form of damages. It alleged that Xerox had not only breached the contract with the firm, but also got involved in intentional & egregious behavior through its scrapping up of a USD 6.1 billion merger agreement that was declared in January this year.
In its lawsuit, Fujifilm is also seeking punitive damages from Xerox Corp. and a USD 183 million as a fee for terminating the merger pact. Earlier in April this year, the company had also appealed a temporary injunction that was granted by a New York court to Deason in order to block the merger deal.
Authentic sources cite that the agreement was scrapped last month after Xerox decided to induct new directors and replace Jeff Jacobson as CEO of the firm with John Visentin, the technology executive of Xerox. People familiar with the matter have claimed that the ongoing administrative changes occurred as per the advice of Carl Icahn and Darwin Deason as well as Xerox’s settlement with these minority stakeholders.
For the record, Icahn & Deason together hold 15% of Xerox’s ownership. Both these shareholders were of the view that the Fujifilm-Xerox merger pact undervalued Xerox.
Industry experts have claimed that if the merger would have resulted in a success, Fujifilm might have owned approximately 50.1% of Xerox’s shares, while the investors of Xerox would have been rewarded with a special dividend worth USD 2.5 billion.
Reportedly, the merger would have combined both Xerox Corp. and Fujifilm Xerox, an entity in which Fujifilm & Xerox had an ownership of approximately 75% and 25% respectively. Earlier, before the termination of the pact, Fujifilm had expected that the merger agreement will deliver at least USD 1.7 billion in terms of cost savings and USD 1 billion in terms of additional revenue every year.