Xerox, founded in 1906 as The Haloid Photographic Company, is an iconic American company known for developing xerographic printing and photocopying technology. Over its long history, Xerox has undergone several major mergers and acquisitions that have shaped its trajectory. Understanding who bought Xerox at key points provides insight into the company’s evolution into the global digital print and document management powerhouse it is today.
Xerox’s Early History and Independent Growth
After being founded in Rochester, New York in 1906, Haloid changed its name to Haloid Xerox in 1958 following the commercial success of its xerographic paper copier machine, the Xerox 914. This revolutionary product allowed for the first time the quick and inexpensive reproduction of documents in an office setting. Over the next two decades, Xerox enjoyed tremendous growth as a pioneering independent company developing innovative imaging technologies under longtime CEO Joseph C. Wilson.
Some key developments at Xerox during its independent growth period include:
- Launching the first automatic xerographic printer, the Copyflo, in 1955
- Introducing the first desktop copier, the Xerox 813, in 1959
- Releasing the Xerox 2400, an innovative long paper copier, in 1966
- Developing the first laser printer, the Xerox 9700, in 1977
By the late 1970s, Xerox had grown into a $3 billion company dominating the global copier market. However, it was about to enter a new era defined by increasing competition from Japanese and American companies and a series of mergers and acquisitions.
Kodak Acquires a Stake in Xerox in the 1980s
Facing new competition from companies like Canon and IBM in the 1980s, Xerox entered into a technology sharing agreement with photography giant Kodak in 1983. As part of this deal, Kodak purchased a 9.9% stake in Xerox for $140 million, which gave it a foothold and voice on Xerox’s board.
This strategic partnership gave Xerox access to Kodak’s expertise in optics, image processing, and printing materials as it looked to transition to new digital imaging technologies. For Kodak, the stake in Xerox was a way to diversify beyond traditional film photography as digital technologies transformed the industry.
While the Kodak partnership did ultimately help Xerox develop pioneering color copiers and printers in the 1980s and 90s, it failed to turn around broader competitive challenges at Xerox. By the late 1990s, Xerox was struggling financially and needed more drastic change to remain viable in the new digital era.
Acquisition by Affiliated Computer Services
Facing mounting losses in the early 2000s, Xerox was acquired in 2009 by business process outsourcing company Affiliated Computer Services in a $6.4 billion deal. This shifted Xerox away from being an independent company to a subsidiary of ACS.
ACS, which specialized in automating administrative tasks through technology, saw Xerox as an opportunity to diversify its business into the document management space. The merged company took the name Xerox following the acquisition.
Some outcomes of the ACS acquisition of Xerox include:
- Shifting Xerox’s focus to services and digital software/cloud technologies
- Launching Xerox’s Digital Alternatives service using automation to simplify business processes
- Expanding Xerox’s business services reach into areas like healthcare claim processing
While becoming part of ACS gave Xerox more scale and diversified its offerings, by 2016 Xerox was facing strained profits and its stock had fallen nearly 60% since the acquisition. This set the stage for the company’s next major transition.
Split into Two Companies in 2016: Conduent and Xerox
In 2016, Xerox announced plans to split into two separate publicly traded companies: Conduent and Xerox.
Conduent would focus on business process services, absorbing Xerox’s outsourcing and analytics operations. This left a more streamlined Xerox to focus on document technology and solutions for enterprises.
The rationale for the split was to allow the two very different businesses to operate and be valued independently. Xerox’s stock price rose nearly 13% on initial news of the coming split, signalling investor optimism.
The separation was completed in 2017, launching Conduent and a refreshed Xerox Corp into the future as distinct companies with their own shareholder bases and management teams.
Conduent Post-Split
As an independent $6.7 billion business, Conduent specializes in transaction processing services and automation for organizations in areas like health care, transportation, and HR. Some facts about Conduent include:
- Based in New Jersey with 78,000 employees worldwide
- 85% of 2017 revenue came from outsourcing services
- Customers include Fortune 100 companies and government agencies
- Has focused acquisitions on expanding capabilities in automation, analytics, and outsourcing
Xerox Post-Split
The new $10.2 billion Xerox Corp returned to a focus on office technology and document management systems/services for enterprises. Some facts about the restructured Xerox include:
- Based in Connecticut with 32,000 employees worldwide
- Major product categories are entry (ApeosPort), mid-range (VersaLink), and high-end (iGen) printers and copiers
- Top competitors include HP, Ricoh, Canon, Konica Minolta, and Kyocera
- Has acquired companies like FreeFlow Maker to expand capabilities in enterprise print automation
The split helped unlock value at Xerox, but competitive pressures in office printing meant it still faced challenges as a smaller independent company.
Proposed Merger with Fujifilm
In 2018, Xerox announced a plan to combine with longtime joint venture partner Fujifilm in a $6.1 billion deal that would diversify it beyond office equipment. Fujifilm, a $20 billion imaging and photography company, would purchase 50.1% of the merged entity.
However, this proposed transformation into “Fuji Xerox” was scrapped after activist investors Carl Icahn and Darwin Deason opposed the deal, arguing it undervalued Xerox and cemented its decline. With a combined 15% stake in Xerox, this investor revolt ultimately blocked the proposed merger.
After the failed Fujifilm deal, Xerox was back to facing slowing sales and needing a new strategy to revitalize its fortunes.
Acquisition by HP
The latest chapter in Xerox’s ownership story came in 2019, when personal computer and printer maker HP Inc. attempted to acquire Xerox in a $33 billion deal that would unite two iconic Silicon Valley hardware companies.
HP saw acquiring Xerox as a way to consolidate the printer and copier business and better compete with rivals like Canon. The combined company would also have enhanced scale in digital document services and been estimated to achieve $2 billion in cost synergies.
However, this proposed takeover was dropped in early 2020 after Xerox stakeholder protests and the onset of economic uncertainty from the COVID-19 pandemic. HP’s stock also fell sharply in 2019, complicating its ability to finance a Xerox purchase.
So while a deal was not ultimately reached, the episode signals Xerox’s openness to mergers that can strengthen its core businesses as the printing industry evolves.
Xerox Today: A Smaller but Independent Company
Despite its eventful history of ownership changes, Xerox remains independent today as a $9 billion global company still shaping the document management space.
Some keys about the current state of Xerox include:
- Headquartered in Norwalk, Connecticut with over 24,000 employees worldwide
- Offers a range of office printers, production printers and related software/services
- Has a strategic partnership with Japanese company Fujifilm spanning product development, supply chains, and joint go-to-market initiatives in Asia
- Has prioritized moving its business toward higher-end and more service-driven offerings
- Remains under pressure from declines in office printing but sees growth opportunities in digital transformation
While Xerox is not the giant it was during its heyday in the 1970s-80s, the company retains strong brand awareness and thousands of customers globally. Its substantial history of reinvention also gives it valuable perspective as it maneuvers to tap growth areas like automated digital workflows in the evolving print industry.
Conclusion
In summary, Xerox has undergone an eventful ownership journey since its start over 100 years ago:
- Founded and grew independently for decades as an innovative pioneer in xerographic copying
- Received an investment from Kodak in the 1980s before competitive challenges mounted
- Was acquired by Affiliated Computer Services (ACS) in 2009 to boost outsourcing capabilities
- Was split into two companies, Conduent and Xerox, in 2016 to optimize operations
- Attempted mergers with Fujifilm and HP in 2018-2020 to gain scale before deals fell through
- Remains independent today, though smaller, and strives to adapt its strong imaging heritage to the digital age
This history shows Xerox evolving through major mergers, spin-offs, and acquisitions as it adapts to economic factors reshaping its industry. The company still faces challenges but has financial flexibility and its brand pedigree on its side as it writes the next chapters in its long ownership story.
