Xerox backs down: offer withdrawn to acquire HP

Xerox he backed off, withdrawing the offer advanced to buy HP. This concludes a negotiation lasting several months, which has risen to the headlines since last November, when Xerox had formalized its interest in the acquisition of HP by formally depositing an offer addressed to its managers. A major event, considering that HP is three times larger than Xerox.

The first proposal had been of $ 27 billion, then increased until you get to $ 35 billion, with a valuation for HP of $ 24 per share; Xerox had also proposed a list of advisors to replace the current HP board of directors.

However, HP had opposed all attempts by Xerox, claiming that the terms of the agreements underestimated the company and questioning the financial ability to support the acquisition by Xerox. A position reaffirmed even a few days ago, when HP invited shareholders to reject the merger also due to the economic shock resulting from the health emergency due to the coronavirus.

And it was this last reason to break throughevidently also from Xerox. The coronavirus was more than HP's reluctance: and so, the company led by John Visentin (since 2018 in charge of Xerox, but previously top manager of Hewlett-Packard and IBM) he has waived the merger after assessing the serious uncertainties generated by the epidemic. In fact, the press release published by Xerox reads:

"The global health crisis and the resulting macroeconomic crisis do not allow us to continue the acquisition of HP. We regret having to resort to this decision, but now the priorities are the health and well-being of our employees, customers, partners and shareholders , and our pandemic response strategy, which surpasses all other considerations. "

Both HP and Xerox have faced one contraction of their activities and have reacted by cutting costs; according to Xerox, the merger could have benefited both. For now, HP seems to hold up better than Xerox, because the demand for PCs would be increasing, at least according to what was stated on Reuters. In any case, analysts report that the market crisis triggered by the pandemic has led several companies to suspend mergers and acquisitions.

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