Xerox is splitting into two companies

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Xerox announced on Friday that it would become two, separate companies and give Carl Icahn three board seats on one of them.

Xerox is splitting in half.

Long after moving beyond its legendary roots as a copier maker, Xerox announced on Friday that it would become two, separate companies.

The first company will focus on helping businesses process vast troves of documents. It will help customers with printing services, payment processing and digitizing paper documents. That was an $11 billion business for Xerox last year.

The second company will help customers outsource key business processes, including HR, customer care and accounting. It will also help customers automate some of their own processes. Xerox brought in $7 billion in sales from its business process outsourcing unit last year.

Xerox (XRX) said it plans to complete the split by the end of 2016, but it did not disclose names for the two companies or who will lead them.

CEO Ursula Burns said the company is splitting up so that it can become leaner and more efficient. Xerox expects the two companies to save a combined $2.4 billion over the next three years because of the split.

"I am confident that the extensive structural review we conducted over the last few months has produced the right path forward for our company," said Burns, in a prepared statement. "We will now position the companies for success."

The biggest catalyst for the decision was activist investor Carl Icahn, who had been calling for Xerox to split up. He will select three of the nine board members to oversee the business processing outsourcing company after the split.

"We applaud Ursula Burns and Xerox's Board of Directors for recognizing the importance of separating Xerox into two publicly-traded companies," Icahn said in a statement.

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Icahn disclosed that he took an 8.1% stake in the company late last year, saying that he intended to discuss a new strategy going forward.

Xerox began as the "Haloid Company" 100 years ago in Rochester, New York.

In 1938, inventor Chester Carlson made the first Xerox copier in a lab in Astoria, Queens. To produce copies, he used a six-step process originally called electrophotography. A patent for the "xerography" technology was granted a few years later.

The Haloid Company formally changed its name to Xerox in 1961, the same year the company went public.

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