Office equipment maker Xerox will buy Chinese printer and printing software maker Lexmark International in a $1.5-billion deal, according to Reuters.
Lexmark, founded from IBM in 1991, was sold to a group of Chinese investors in a $3.6-billion deal in 2016. The purchase from Ninestar Corp, PAG Asia Capital and Shanghai Shouda Investment Centre will bring Lexmark back into US ownership.
Xerox faces stiff competition from HP and Canon. Its shares, which have fallen more than 50 per cent this year, were trading almost 5 per cent higher before the bell. The deal with Lexmark will give Xerox the much-needed scale to compete more effectively.
The combined company is expected to serve more than 200,000 customers in 170 countries, gaining market share among the world’s top five companies in various printing segments. The deal will also enable Xerox to expand its presence in the Asia-Pacific region while strengthening its ability to attract customers in growing A4 segment.
Xerox expects to finance the deal, which is likely to close in the second half of 2025, through a combination of cash and debt financing. In October, Xerox said it would buy ITsavvy, an Illinois-based IT products company, for $400 million as the company sought to expand its IT services business.
