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UPDATE: Xerox to combine with Fuji Xerox in $6.1B deal, 10,000 jobs to be cut

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UPDATE: Xerox to combine with Fuji Xerox in $6.1B deal, 10,000 jobs to be cut

FUJIFILM Holdings Corp. confirmed reports that Xerox Corp. will be combined with their longstanding joint venture, Fuji Xerox, where 10,000 jobs globally will be slashed as part of a structural reform aimed at improving profitability and productivity.

FUJIFILM now owns 75% of Fuji Xerox. The two companies said Fuji Xerox will buy back that stake from FUJIFILM for around $6.1 billion, using bank debt, Reuters reported Jan. 31. FUJIFILM will use the proceeds to purchase 50.1% of new Xerox shares.

The deal is expected to be completed around July to August, said Reuters. The combined company will have dual headquarters in the United States and Japan, and will be listed in New York, the report added.

"The combined company will be a global leader in innovative print technologies and intelligent work solutions, with annual revenues of $18 billion and leadership positions in key geographic regions," Xerox said in a statement.

Upon close of the transaction, Xerox CEO Jeff Jacobson will head the combined company, which is projected to deliver $1.7 billion in total annual cost savings by 2022, around $1.2 billion of which is expected by 2020.

FUJIFILM said structural reforms at Fuji Xerox are expected to result in cost reductions of ¥50 billion in and after the fiscal year ending March 2020.

"The market environment surrounding ... Fuji Xerox has grown increasingly severe," the company said of the structural reform, which would entail ¥49 billion in expenses in the second half of the fiscal year through March 2018. The reform cost for the fiscal year ending March 2019 and 2020 is expected to be ¥17 billion and ¥6 billion, respectively.

FUJIFILM lowered its operating profit forecast for the fiscal year ending in March to ¥130 billion, from a previous ¥185 billion projection due to the structural reform and the current performance of its information solutions and document solutions businesses.

The new company will maintain its NYSE listing and have dual headquarters in the U.S. and Japan, with presence in over 180 countries. It will also maintain Xerox and Fuji Xerox brands within its respective operating regions.

As of Jan. 30, US$1 was equivalent to ¥108.89.

Article amended at 2:00 HK time on Feb 1, 2018, to add details on the joint venture.