IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Xerox secures $24 billion funding for HP takeover bid

Company claims the backing provides proof that required finances are available for the deal

Xerox HP Logo

Xerox has pushed on with its proposed buyout of rival HP, after the printer and copier giant successfully secured $24 billion in binding financing commitments.

The development means that funds required for a potential takeover of its larger market rival will be provided by three major financial institutions – Citi, Mizuho and Bank of America.

The two firms have been at loggerheads since Xerox's attempted buyout bid was unanimously rejected by the HP board back in November. At the time, HP said the proposals "significantly undervalued" the business and was not in its best interests.

The company, which is reportedly valued at around $27 billion compared to Xerox's $10 billion, also subsequently questioned whether Xerox had the financial strength to purchase a business approximately three times its own size.

Despite the rejection, Xerox pushed on and began putting its case forward direct to HP's shareholders, arguing that the increased cash flow would help pare debt, raise capital returns, and drive investment in innovation.

Now, in a public letter to those shareholders, Xerox Holdings Corporation CEO John Visentin said the $24 billion in financing commitments is designed to dispel HP concerns that it would be unable to put up the numbers required to complete the deal.

"We have always maintained that our proposal is not subject to a financing contingency, but in order to remove any doubt, we have obtained binding financing commitments (that are not subject to any due diligence condition) from Citi, Misuho and Bank of America," Visentin explained.

"My offer stands to meet with you in person, with or without your advisors, to begin negotiating this transaction."

Xerox maintains that combining the two printer and copier businesses would prove to be "value-creating combination" that would see revenue growth of up to $1.5 billion over the next three years, as well as cut operating costs by up to $2 billion.

"It remains clear to all of us that bringing our companies together would deliver substantial synergies and meaningfully enhanced cash flow that could, in turn, enable increased investments in innovation and greater returns to shareholders," Visentin told shareholders.

Featured Resources

The state of Salesforce: Future of business

Three articles that look forward into the changing state of Salesforce and the future of business

Free Download

The mighty struggle to migrate SAP to the cloud may be over

A simplified and unified approach to delivering Enterprise Transformation in the cloud

Free Download

The business value of the transformative mainframe

Modernising on the mainframe

Free Download

The Total Economic Impact™ Of IBM FlashSystem

Cost savings and business benefits enabled by FlashSystem

Free Download

Most Popular

Cyber attack on software supplier causes "major outage" across the NHS
cyber attacks

Cyber attack on software supplier causes "major outage" across the NHS

8 Aug 2022
Why convenience is the biggest threat to your security

Why convenience is the biggest threat to your security

8 Aug 2022
How to boot Windows 11 in Safe Mode
Microsoft Windows

How to boot Windows 11 in Safe Mode

29 Jul 2022