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Components & Peripherals News

HP’s $3.3B Acquisition Of Poly: Six Things You Need To Know

Shane Snider, Steven Burke

HP’s $3.3 billion acquisition of Poly has big implications for hybrid work with HP plans for a “more complete” portfolio of hybrid work offerings and improved audio/video capabilities on HP systems.

The Impact On The Never-ending HP-Xerox Merger Rumors

The HP acquisition of Poly could have an impact on the long-standing rumors and possibility of a potential HP and Xerox merger.

Two directors of Xerox, including Chairman Keith Cozza, stepped down last week in a move that reignited speculation that Xerox may be in for more merger or acquisition talks.

Cozza became chairman of the board in May of 2018 as a way to appease activist shareholder Carl Icahn, who currently holds 20.5 percent of Xerox’s shares and a stake in HP.

At the time, Icahn and Darwin Deason, two of Xerox’s three largest individual shareholders, objected to the proposal by Fujifilm Holdings to acquire Xerox. That merger had been blocked a couple weeks earlier by Supreme Court of the State of New York, County of New York.

Xerox in late 2019 then revealed a plan to acquire HP Inc. That bid was eventually withdrawn. Two weeks after Xerox’s HP bid, Icahn unveiled a 4.24 percent stake in HP.

In an interview with Barron’s in March, HP CEO Enrique Lores said HP’s “priority” is to execute its own plan which is “going to create a lot of value” for shareholders. “We are open to exploring consolidation, but there are other opportunities we’re considering from an M&A perspective,” he said.

Lores told Barron’s that the Xerox takeover attempt did not recognize HP’s value as a “stand alone” company. “The second problem is the high leverage the combined company would have, which we consider extremely risky,” he said. “Third is the synergies they’re using to calculate the value of the deal are unrealistic. They count cost savings we’re already finding as a stand alone company.”

In an interview with CRN in February, Xerox CEO John Visentin told CRN that the HP deal was “dead.” That said, he also noted that he believes the printer industry should consolidate.

“It’ll always take two players to want to consolidate and we’ve always been very vocal that this industry is too large and that we should start seeing some consolidation, which we haven’t yet,” he said.

 

 

 
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