US-based Xerox plans to implement "a structure in which the existing company will become a wholly owned unit of a new holding company.” The move comes after a US judge last month rejected the company's bid to dismiss a $1 billion lawsuit filed by Japan's Fujifilm over their failed merger deal.
Holding companies reduce risk for owners and board members, making it easier to sell divisions, contain litigation and protect individuals.
Thursday's announcement to the U.S. Securities and Exchange Commission (SEC) came two weeks after a federal judge rejected Xerox Corp's bid to dismiss a $US1 billion lawsuit filed by Fujifilm after the US company last year terminated a proposed $US6.1 billion merger between the joint-venture [Fuji Xerox] partners.
In its SEC filing, Xerox said the move would provide “strategic, operational and financial flexibility.”
The business operations, directors and executive officers of the Registrant will not change as a result of the Reorganization.
The Reorganization is intended to be implemented via a tax-free transaction for U.S. federal income tax purposes that will result in each holder of Registrant’s common stock owning the same number of shares of common stock in the new holding company and each holder of Registrant’s preferred stock owning the same number of shares of preferred stock in the new holding company.
It is expected that the directors and executive officers of Registrant will also serve in the same capacities for the new holding company and that shares of the new holding company’s common stock will trade on the New York Stock Exchange under Registrant’s current ticker symbol “XRX.”
The Reorganization is subject to shareholder approval, regulatory approval and other customary conditions and is expected to be implemented in mid-2019, though there can be no assurance as to its completion or timing.
Xerox said more details about the reorganisation would be included in a statement/prospectus relating to the 2019 annual meeting of shareholders, which will be mailed to shareholders when available.