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Printer Industry Consolidation: 5 Big Things To Know

HP and Xerox may not be joining forces for now, but there are plenty of signs that the industry is still poised for M&A activity.

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Why HP-Xerox Fell Apart

On March 31, Xerox's hostile bid to acquire HP came to an end after five months of corporate drama. Xerox withdrew its tender offer for HP shares and said it would not pursue the nomination of its candidates to HP's board of directors. While HP's board had staunchly opposed the takeover bid and enacted numerous measures to fight it, Xerox's decision resulted from the COVID-19 pandemic and the "resulting macroeconomic and market turmoil," the company said.

The move came after Xerox's share price plummeted amid the global spread of the coronavirus. Xerox’s proposed $34.9 billion cash-and-stock deal for HP was pegged to a Xerox stock price of $37.68 a share from Feb. 6. Xerox's shares closed at $18.94 on March 31--leaving a massive gap in the company's proposed acquisition deal for HP, and requiring Xerox to either raise more cash or offer more stock. Neither option appeared tenable; more cash would've further saddled the combined entity with debt, while more stock would likely have provided HP shareholders with a majority stake in the merged company.

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