Xerox to Acquire Lexmark in $1.5 Billion Deal to Bolster Print Business
Office equipment manufacturer Xerox has agreed to buy Chinese-owned printer and printing software maker Lexmark International in a $1.5 billion deal, the companies announced on Monday. The purchase from Ninestar Corp, PAG Asia Capital and Shanghai Shouda Investment Centre will bring Lexmark back to U.S. ownership. Lexmark was formed out of IBM in 1991 and was previously sold to a group of Chinese investors in a deal valued at $3.6 billion in 2016.
The deal will provide Xerox with a much-needed scale to compete better in the market. The combined company is expected to serve more than 200,000 clients in 170 countries and have a market share among the top five firms globally in various print segments. The deal will also allow Xerox to expand its presence in the Asia-Pacific region and strengthen its ability to tap customers in the expanding A4 segment, which includes smaller-format printers and copiers commonly used in homes and offices.
Xerox expects to finance the deal, which is expected to close in the second half of 2025, through a combination of cash on hand and debt financing. As part of the financing, Xerox is reducing its annual dividend to 50 cents per share from $1, starting with the one expected to be declared in the first quarter of 2025, to help with its efforts to lower debt.
The acquisition is part of Xerox’s strategy to expand its IT services business. In October, the company announced that it would buy ITsavvy, an Illinois-based IT products firm, for $400 million. The acquisition of Lexmark is expected to help Xerox improve its competitiveness in the market and drive growth in its mainstay business.
