Xerox to split into two companies, Icahn to get board seats on one

Fri Jan 29, 2016 11:00am EST
 
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By Kshitiz Goliya and Liana B. Baker

(Reuters) - Xerox Corp (XRX.N: Quote) will split into two companies, one holding its legacy printer operations and the other its business process outsourcing unit, it said on Friday, in a bid to be more nimble after years of trying to integrate the businesses.

Activist investor Carl Icahn, who first revealed a stake in Xerox in November, will get three board seats on the outsourcing company. He tweeted on Friday that "the separation will greatly enhance value for Xerox Corp shareholders."

Xerox shares rose nearly 6 percent to $9.78.

Xerox Chief Executive Officer Ursula Burns said in an interview on Friday that the strategic review had been underway before Icahn publicly revealed he had bought Xerox shares.

"The reason why it was easy to get to a decision is because we do have two businesses that rotate around two different axes," Burns said.

Xerox also posted fourth-quarter results, with profit rising 42.5 percent and costs and expenses falling 7.3 percent.

The company, whose shares had fallen more than 30 percent in the past 12 months, has tried to turn itself around by focusing on software and services as customers cut printing costs.

The document technology company, which will make printers and copiers, will have annual revenue of $11 billion, while the business process outsourcing company will have $7 billion in revenue.   Continued...

 
Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014.  REUTERS/Brendan McDermid