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Xerox Corp to split into two companies in push toward services

Xerox is splitting into two publicly traded companies, with one division including its copier and scanner hardware, and the other a provider of services for government and industries.

Xerox Corp. is splitting into two publicly traded companies C essentially breaking out the operations acquired using its largest-ever purchase 5 years ago, and investor Carl Icahn will be given three board seats.

The division can create an US$11-billion document technology company which includes the namesake copier and scanner hardware, along with a US$7-billion provider of services to government and industries such as health care and transportation, Xerox said Friday in a statement. Leadership and also the names of the two companies is decided in the future, based on the statement, and also the move is anticipated to become performed by no more this year.

Icahn, the billionaire investor that has been building a stake in Xerox since November and today holds a lot more than 8 per cent of the company, will select three directors on the service company’s board, according to separate statement. That business will also seek another candidate to become chief executive officer.

The shares were up 3.7 per cent to US$9.59 at 9:37 a.m. in New York, after rising as much as 6.7 percent in pre-market trading. Norwalk, Connecticut-based Xerox fell 13 percent this season through Thursday.

“Short-term Xerox is deserving of some boost,” Anurag Rana, an analyst with Bloomberg Intelligence, said. “The long-term value of these companies is going to be the way it redefines its services inside a cloud-first and mobile-first world. Xerox isn’t known to be the main thing on those movements.”

Moody’s Investors Service said Xerox’s corporate debt ratings take presctiption review for any possible downgrade, reflecting the vista that the split can lead to two smaller companies with less business diversity and profitability than the current combined business.

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