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Xerox shares plummet on ACS takeover

SHARES in photocopying giant Xerox fell by more than 14 per cent yesterday after it said it would buy Affiliated Computer Services (ACS) in a cash and stock deal worth $6.4bn (&pound;4bn).<br /><br />The group said it was looking to diversify and move into data management and IToutsourcing.<br /><br />Xerox, which is the biggest supplier of digital printer and document management services in the world, said it would also take on ACS&rsquo; $2bn debt as part of the deal. <br /><br />Ursula Burns, Xerox&rsquo;s chief executive, said the deal was a &ldquo;game-changer&rdquo; which would lead to &ldquo;stronger revenue and earnings growth&rdquo;.<br /><br />However, the stock closed down 14.4 per cent to $7.68, on fears that the firm might be paying too much for the business.<br /><br />ACS is a provider of information technology services to the telecoms, retail, financial services and education industries. It will operate as a separate firm after the takeover.<br /><br />The news came as Abbott Laboratories said it would buy the pharmaceutical arm of Solvay, its Belgian development partner, ending a months-long auction run by Citigroup, Morgan Stanley and Rothschild.<br /><br />The deal, struck over the weekend, gives Abbott full control of cholesterol treatments TriLipix and Tricor and a bigger footprint in emerging markets. <br /><br />Plastics and chemicals producer Solvay said in April it was reviewing its pharmaceuticals business. Interested parties also included&nbsp; private-equity-owned Nycomed, Takeda of Japan and Solvay&rsquo;s domestic rival UCB.