Two days ago, the iconic and troubled American corporation Xerox was sold to Japan’s Fujifilm for $6.3 billion dollars, ending its solo history in this country.
Losing money, under pressure
The new company will be known as Fuji Xerox and, per Reuters, “become a subsidiary of Fujifilm, with dual headquarters in the United States and Japan, and listed in New York.” Xerox had been under investor pressure to “find new sources of growth as it struggles to reinvent its legacy business amid waning demand for office printing.” Xerox had a loss of $196 million in the fourth quarter last year.
Spun off Medicaid business last year
Xerox is of course still being sued for Medicaid fraud by the State of Texas because of the company’s orthodontic prior authorization process from 2004 to 2011 when it was the lead private contractor for the Texas Medicaid and Healthcare Partnership (TMHP). Xerox actually got out of this healthcare business back at the beginning of 2017 when it spun off all its business services business into a new $6.4 billion corporation called Conduent.
Losses accrue for spin-off
Conduent hasn’t faired too well either. Last February, just a month after the spinoff, the new company reported a $935 million goodwill impairment charge, along with another $161 million charge related to a failed project with the State of New York. You may remember around the time that Texas filed suit against the company for Medicaid fraud in May of 2014, New York awarded Xerox a contract to revamp its Medicaid system. That’s apparently the one that failed. So total losses for the company for 2016 amounted to around $1.2 billion.
Fuji admitted to improper accounting standards
Fuji and Xerox appear to be a match made in heaven because as Reuters reports “The takeover deal comes less than a year after Fujifilm admitted improper accounting standards at Fuji Xerox,” then a long-standing joint venture between Xerox and Fuji.
Revelations coming
Our next few stories will be dealing with revelations about Xerox from depositions taken in relation to the Texas case.