Xerox Corp., under pressure to find new growth sources amid shrinking demand for its printer and copier business, is in talks for a deal with Japanese camera maker Fujifilm Holdings that could include a change in control of Xerox, the Wall Street Journal reported.
Norwalk, Connecticut-based Xerox has been targeted by activist investor Carl Icahn as it struggles to reinvent its legacy business amid waning demand for office printing.
Fujifilm is trying to streamline its copier business with a larger focus on document solutions services.
Xerox, which pioneered photocopiers, and Fujifilm already have a five-decade old Tokyo-based copier joint venture focusing on the Asia Pacific region including Japan and China, leaving Xerox to cover the rest of the world.
The Journal report said a full takeover of Xerox is not on the table, citing one of the people.
Xerox declined to comment. Fujifilm said it would not comment on speculative reports.
Xerox has a market value of about $7.7 billion, while Fujifilm is valued at around $22 billion.
Xerox “desperately” needed new leadership as it was slow to launch new products and increase revenue, Icahn wrote in an open letter to shareholders in December, a day after nominating four members to the board.
He is Xerox’s biggest shareholder with a stake of 9.7 per cent.
Xerox spun off its business process outsourcing unit in 2016 and separated into two independent, publicly-traded companies.
Fujifilm shares fell 1.8 per cent in Tokyo to 4,724 yen per share following the Journal report, while the broader Japanese market slipped 0.3 per cent.
The copier joint venture, Fuji Xerox, was created in 1962 and now accounts for nearly half of Fujifilm’s sales and operating profit.
Fujifilm has been seeking growth outside its shrinking photographic film business, stepping up its acquisition drive in areas such as regenerative medicine.
Past deals include the 2015 purchase of Cellular Dynamics International Inc., a United States biotechnology firm that makes human-induced pluri-potent stem (iPS) cell lines and tissue cells.
Last August, it said it aimed to spend 500 billion yen ($4.49 billion) in strategic acquisitions over three years.