Xerox and Icahn Announce Company Will Split Into Two

In 2012, CEO of Xerox Ursula Burns said if the company was to continue making copiers for the next few decades, it would no longer exist.

To ensure the survival of the century old company, she diversified its business with different services, or helping companies to simplify their processes with tech, through billions in different acquisitions.

Just over three years later, amidst the increase in activist investors that are pushing the older companies into slicing and dicing themselves up to drive their value, Xerox has now decided it will spin off that services business.

The Business Process Outsourcing business as it has been called will become a publicly traded company before the end of 2016, according to a statement on Friday from Xerox.

The remaining part of Xerox, which will be called Document Technology, is to include the hardware, which made the name Xerox synonymous with photocopying a number of decades ago, like printers, copy machines and scanners.

The actual names and leadership of the two will be released at a later date.

The split comes as a result of a review of the structural options that Burns announced past October, although at the time, she said she preferred to keep the business together.

In November, Carl Icahn began amassing shares of Xerox that by December were up to 8.3%.

The activist investor believed shares of Xerox were undervalued so he pursued talks with Xerox management to find a way to improve its operational performance and other possible alternatives that Icahn thought would improve the worth of the business for its shareholders.

Part of this settlement with Icahn includes the billionaire investor choosing three of the Business Process Outsourcing board of directors while Xerox will have six. Icahn will pick one person to advise the CEO search process for the company as well.

Burns said via an interview on television that her role with either company was not yet determined, without saying if she were planning to stay.

Xerox announced as well that it is aiming to save more than $2.4 billion in its strategic transformation programs through all its segments over the upcoming three years.

 

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