Deason, Icahn Victorious As Xerox Calls Off Fujifilm Deal, Shakes Up Board

Xerox Corp XRX announced late Sunday it terminated its agreement with Fujifilm to merge Xerox and Fuji Xerox . 

The firm instead pivoted to an agreement with Carl Icahn and Darwin Deason — major shareholders and opponents of the deal — to resolve a pending proxy battle regarding the 2018 shareholder meeting. 

The settlement involves the appointment of John Visentin as CEO and the replacement of five board members.

Fujifilm failed to meet timelines and demonstrated unresolved accounting issues, according to Xerox. 

Why It’s Important

The amended strategy proved the power of the company’s activist investors.

"We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm,” Icahn said in the company release.

“With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox. We have often said that the most important person at a company (by far) is the CEO. We are therefore also pleased that John Visentin, a tried-and-true veteran in this area, will be taking the helm."

Icahn’s fellow shareholders appeared less satisfied. Xerox plunged 3.8 percent premarket Monday.

The shift does not resolve every activist concern, according to Xerox. 

“It does not affect any claims of Mr. Deason or other Xerox shareholders against Fujifilm for aiding and abetting,” the company's press release said. 

What’s Next

Xerox postponed its 2018 shareholder meeting to an undetermined date and reported that the board would “convene immediately to discuss strategic alternatives.”

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