Chinese-owned printer maker Lexmark bought by Xerox for $1.5 billion

NORWALK, Connecticut: Xerox has announced plans to acquire Lexmark International, a Chinese-owned printer and printing software company, in a US$1.5 billion deal aimed at revitalizing its core business.

The purchase, disclosed on December 23, marks Lexmark's return to U.S. ownership after being sold to a consortium of Chinese investors in 2016 for $3.6 billion.

The deal includes Lexmark's debt and involves sellers Ninestar Corp, PAG Asia Capital, and Shanghai Shouda Investment Centre. Lexmark, originally formed from IBM in 1991, will now join Xerox in a move expected to enhance its market position.

Xerox, a globally recognized name in office equipment, has faced declining revenues for five consecutive quarters as demand for printers and related hardware wanes in the digital age. Competing with major players like HP and Canon, Xerox aims to use the Lexmark acquisition to regain its footing.

"This acquisition provides Xerox with much-needed scale to compete effectively," the companies stated. The combined entity will serve over 200,000 clients across 170 countries, positioning itself among the top five global firms in various print segments.

Lexmark's inclusion will also enable Xerox to strengthen its presence in the Asia-Pacific region and target customers in the growing A4 segment, which includes compact printers and copiers widely used in homes and offices.

To finance the acquisition, expected to close in the second half of 2025, Xerox plans to use a mix of cash on hand and debt financing. As part of these efforts, Xerox will reduce its annual dividend from $1 to 50 cents per share starting with the first quarter of 2025. The company's shares, which have declined by over 50 percent this year, rose nearly 5 percent following the announcement.

The Lexmark acquisition is the latest in Xerox's strategy to diversify and expand its offerings. In October, Xerox announced a $400 million deal to acquire ITsavvy, an Illinois-based IT products firm, signaling its ambitions to grow in the IT services sector.