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Xerox sells Fuji stake
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March 6, 2001: 11:51 a.m. ET
Fuji pays $1.3B for 50% of Xerox stake in Asian joint venture
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NEW YORK (CNNfn) - Xerox Corp. agreed Tuesday to sell 50 percent of its stake in Fuji Xerox to Fuji Photo Film Co. for more than $1.3 billion cash as the troubled document company attempts to return to profitability.
Stamford, Conn.-based Xerox (XRX: Research, Estimates) will retain a 25 percent stake in Fuji Xerox and will maintain product and technology agreements with the firm.
The sale will result in an after-tax gain of about $310 million, Xerox said. The deal is expected to close by the end of March, subject to Japanese regulatory approval.
"With this transaction, Xerox greatly enhances its liquidity and has made significant progress on its turnaround pledge to generate more than $2 billion in asset sales," Xerox CEO Paul Allaire said.
The turnaround plan
Xerox disclosed a turnaround plan to reduce its heavy debt load in October, when it announced its first quarterly loss in 16 years. The plan included selling half its stake in the Fuji Xerox joint venture to Fuji, leaving Xerox with 25 percent. Xerox also is in talks to sell Xerox Engineering Systems and its interest in some of its spinoff companies, including ContentGuard and Inxight.
The copier company also hopes to sell equity in its inkjet printer business and is looking for investors in its Palo Alto, Calif., research center, a spokeswoman said.
 In January, Xerox hired the Blackstone Group to serve as financial advisers, but emphasized that it was not thinking about a bankruptcy plan.
With the sale Tuesday, Xerox is close to its goal of raising $2 billion to $4 billion. The deal with Fuji is Xerox's largest asset sale so far. In December, Xerox completed the sale of its Xerox (China) Ltd. and Xerox (Hong Kong) Ltd. to Fuji Xerox for $550 million cash.
Xerox also hopes to slash 4,000 jobs this year as it attempts to return to profitability. Xerox cut 2,000 workers last year and plans to cut 4,000 by the end of March. The company will be making additional cuts throughout the year, a spokeswoman said in February.
The troubled company also reportedly has been in talks with buyout firms Texas Pacific Group, Kohlberg Kravis Roberts & Co. and Clayton Dubilier & Rice to sell its assets.
Xerox shares gained 26 cents to $7.02 in late morning trading Tuesday. 
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