US-based Xerox Corp. had said on Sunday evening (Eastern Time) that it was ending its agreement with Japan's Fujifilm Holdings that the companies had earlier this year announced regarding their 56-year old joint venture Fuji Xerox, which would combine with Xerox. Fujifilm was to hold 50.1 percent stake in the new Fuji Xerox while Xerox shareholders would hold the rest.
The deal was a part of a restructuring that would save an estimated $1.7 billion a year by 2022 for the companies.
Xerox's activist investors Carl Icahn and Darwin Deason, however, opposed the deal saying that the Fujifilm had significantly undervalued the company.
In a statement released by the iconic US copier company, it said, "Xerox (NYSE: XRX) today announced that, at 5:00 p.m. ET on May 13, 2018, it notified Fujifilm that the previously announced transaction agreement to combine Xerox with Fuji Xerox is being terminated in accordance with its terms due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by April 15, 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the Subscription Agreement and taking into account other circumstances limiting the ability of the Company, Fujifilm and Fuji Xerox to consummate a transaction.
Thereafter, Xerox entered into a new settlement agreement with Carl Icahn and Darwin Deason."
The Japanese company has disputed that it is a "unilateral decision" and thinks that the American company doesn't have the right to call off the deal.
Icahn and Deason hold 15 percent combined stake in Xerox, and made an aggressive campaign against the deal They have also striked an agreement with the company to replace CEO Jeff Jacobson and 5 other directors on the board with their own.
Fujifilm, on the other hand, said in a statement that it was reviewing its options, including legal action.