Xerox (NYSE: XRX) rose 26 U.S. cents to $7.02 inmorning trading Tuesday after the company said it will sell half its stakein Fuji Xerox to its joint-venture partner, Fuji Photo Film, for more than$1.3 billion in cash.
With the sale, Xerox has raised almost $2 billion through asset sales sinceDecember. In October, the company announced a plan to sell $2 billion to $4billion in assets, cut costs by more than $1 billion, and focus on its coredocument services and printing businesses.
“With this transaction, Xerox greatly enhances its liquidity, and has madesignificant progress on its turnaround pledge to generate more than $2billion in asset sales,” said chairman and chief executive officer PaulAllaire.
“Today we have not only delivered on a key element of our asset salestrategy, but also reached a major milestone in restoring our financialstrength,” Allaire said. “Our cost-reduction efforts are being aggressivelyimplemented and remain on target to achieve the desired results.”
Xerox said it expects an after-tax gain of about $310 million on the sale ofits Fuji Xerox stake. The deal is expected to close by the end of this month.
The deal boosts Fuji’s ownership in the venture to 75 percent from 50percent, and cuts Xerox’s stake to 25 percent. However, Xerox said it “retains significant rights as a minorityshareholder.”
The companies will maintain other product and technology agreements, withFuji Xerox continuing to provide Xerox with color office-product technologyand research and development assistance.
In December, Xerox completed the sale of Xerox (China) Ltd. andXerox (Hong Kong) Ltd. to Fuji Xerox for $550 million in cash.
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