Fujifilm Sues Xerox for $1 Billion Over Merger Gone Bad

Fujifilm has asked the court to force Xerox to pay $1 billion for pulling out of the planned merger between the companies.

Fujifilm, based in Japan, filed its lawsuit in New York district court Monday seeking punitive damages due to the egregious and intentional conduct of Xerox in canceling the merger deal.

Xerox was ready to merge together with Fuji Xerox, which is a joint venture in existence between the two companies. The deal would have provided Fujifilm with control of the new entity.

However, Darwin Deason along with Carl Icahn, two activist investors, who together own more than 15% of Xerox, were vehemently opposed to the merger, saying that it undervalued the American copier and printer firm.

Last month Xerox said it entered into a new agreement with both Deason and Ichan, which included the resignation of CEO Jeff Jacobson as well as five member of the board of directors.

In a prepared statement, Xerox said it was very confident about the right it had to end the deal. It added that it would be seeking its own remedies for the misconduct and mismanagement of Fujifilm.

The amount that Fujifilm is seeking is much higher than the termination fee of $183 million that the companies agreed to if one of the two were to walk away from their agreement. The firm, based in Japan, argues that Xerox deprived it of benefits of the agreement they reached.

Fujifilm also had demanded that Xerox pay the $183 million termination fee.

It wrote in its statement that Fujifilm continued with the belief that its takeover of the U.S. based company as the only correct way to benefit the investors for both companies.

The company added that it is not consistent with democracy amongst shareholders to allow Darwin Deason and Carl Icahn, who are minority shareholders that have 15% of all Xerox shares to be dictating Xerox’s fate.

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