United States reprographics equipment maker Xerox Corp is in talks to buy financial printing firm RR Donnelley & Sons Co, Bloomberg yesterday reported, citing people with knowledge of the matter.
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RR Donnelley also announced a plan past year to split into three publicly traded companies, a plan it has not yet completed.
Xerox would acquire R.R. Donnelley, and merge some of it with its copier, printer and related-services business and the rest with its smaller business process outsourcing services, the reports said. The Xerox split will separate those two businesses into separate entities.
If the talks are successful Bloomberg said that Xerox would buy RRD and merge some of its operations with its post-split Dollars 11bn document technology and graphics business, Xerox Corporation, and the rest with its USD 7bn BPO business, Conduent. Earlier in the day, R.R. Donnelley shares hit a new 52-week high of $19.83. One of them is Tim Melvin, a Real Money contributor who feels that the merger move may not be the best given that RRD is a highly prized company.
At the close of trading on Monday, 12 July, Xerox had a market capitilisation of United States dollars 9.6bn, compared with RRD at USD 3.9bn.
Representatives of Xerox and R.R. Donnelley declined to comment.
Last month, Xerox named Jeff Jacobson the new chief executive officer of its copier business.
Xerox announced in January that it would split into two companies, weeks after activist investor Carl Icahn bought more than 7 percent of company’s stock and announced his intention to discuss possible operational improvements and strategic alternatives for the company. A deal with Xerox would negate that plan, the people said.
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Both Bloomberg & Reuters are reporting the company has been in talks to acquire the Chicago-based firm. Xerox stock, which fell 0.42 percent during trading Monday to close at $9.50 a share, jumped almost 3 percent after the closing bell on Wall Street. R.R. Donnelley’s stocks rose, as well.
