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 (£4bn).
The group said it was looking to diversify and move into data management and IToutsourcing.
Xerox, which is the biggest supplier of digital printer and document management services in the world, said it would also take on ACS’ $2bn debt as part of the deal.
Ursula Burns, Xerox’s chief executive, said the deal was a “game-changer” which would lead to “stronger revenue and earnings growth”.
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.
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.
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.
The deal, struck over the weekend, gives Abbott full control of cholesterol treatments TriLipix and Tricor and a bigger footprint in emerging markets.
Plastics and chemicals producer Solvay said in April it was reviewing its pharmaceuticals business. Interested parties also included private-equity-owned Nycomed, Takeda of Japan and Solvay’s domestic rival UCB.