Fujifilm seeking lawsuit against Xerox

  • Ben Norman
  • June 22, 2018
  • 0

Fuji Xerox breakup could get messy

Fujifilm will sue Xerox for $1 billion after the company pulled out of the agreed upon Fuji Xerox merger.

The Japanese company’s lawsuit is based around the “punitive damages for Xerox’s intentional and egregious conduct” after canceling the deal, according to their district court’s filing. The deal would have given Fujifilm complete control over the combined companies, and the firm believes that Xerox denied them those benefits that were agreed upon.

Xerox pulled out of the deal after major investors Carl Icahn and Darwin, who own a combined 15% of the company, convinced them it was a poor business decision that undervalued the company. They also managed to have CEO Jeff Jacobson and five other board members fired because of the deal.

The agreed-upon termination fee is $183 million, but Fujifilm will still seek the $1 billion on top of the termination fee. Xerox is currently valued at $7.7 billion, so this would put a significant dent in their company if the lawsuit passes in court.

However, Fujifilm’s lawsuit is far from settled, as Xerox has a case of their own against the company. In April, a court case paused the acquisition, for Fujifilm failed to offer a plan for improving the terms of the deal.

Consequently, neither side has an especially strong case, but Fujifilm will likely not gain the $1 billion they are seeking. With a termination fee constructed in the contract, a court will likely find it tough more increase the fine by over 500%.

Mergers and acquisitions have been popular these days with major companies like AT&T and Time Warner Cablestriking deals. However, terminations rarely surface, so this case will be an interesting one to follow.

 

Featured image via Wikimedia Commons

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: Hi, I'm Ben! Aside from BIZNOB, I have a passion for sports, music, reading, and photography. I love sharing my thoughts with the world, and I hope you enjoy what I have to say!