Fujifilm wins appeal in battle with Xerox over scrapped merger

The two companies agreed in January to a complex deal that would have merged Xerox into their Asia joint venture Fuji Xerox and given Fujifilm control. (Reuters)
Updated 17 October 2018
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Fujifilm wins appeal in battle with Xerox over scrapped merger

  • Xerox in May scrapped a $6.1 billion merger deal with Fujifilm
  • A US court overturned preliminary injunctions requested by activist investors that had blocked a planner merger

TOKYO: Fujifilm Holdings Corp. has won an appeal in its legal battle with Xerox Corp, with a US court overturning preliminary injunctions requested by activist investors that had blocked a planner merger.
Xerox in May scrapped a $6.1 billion deal with Fujifilm in a settlement with investors Carl Icahn and Darwin Deason that also handed control of the US photocopier giant to new management.
The ruling by the New York State Appellate Court could give Fujifilm leverage to bring Xerox management back to the negotiating table.
The court found in its ruling that Xerox’s former CEO Jeff Jacobson had neither misled or misinformed the board.
“The board, which engaged outside advisers and discussed the proposed transaction on numerous occasions prior to voting on agreeing to present it to the shareholders, did not engage in a mere post hoc review, nor was the transaction unreasonable on its face,” the ruling also said.
Fujifilm said in a statement that it stands by its view that the original planned merger remains the best option for the shareholders of both companies.
“(The) Court’s decision will allow us to discuss with Xerox the fulfillment of the original agreement. All Xerox shareholders ought to be able to decide for themselves the operational, financial, and strategic merits of the transaction to combine Fuji Xerox and Xerox,” it said.
The two companies agreed in January to a complex deal that would have merged Xerox into their Asia joint venture Fuji Xerox and given Fujifilm control. That prompted Icahn and Deason, who own 15 percent of Xerox and argued the US firm was being undervalued, to launch a proxy fight.
Representatives for Xerox and Deason were not immediately available for comment.


India watchdog orders DP World unit to withdraw some notices to clients at Mumbai port

Updated 9 min 57 sec ago
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India watchdog orders DP World unit to withdraw some notices to clients at Mumbai port

  • India has been investigating antitrust violations at Mumbai port
  • DP World, Maersk unit asked to withdraw some customer adviseries

NEW DELHI: India’s antitrust watchdog has ordered Dubai’s DP World and Denmark’s A.P. Moller-Maersk and to withdraw certain customer adviseries which it said could hamper growth of the country’s largest container port in Mumbai, a document seen by Reuters showed.
The Competition Commission of India (CCI) last year ordered a probe into suspected antitrust violations by DP World and Maersk units at the terminals they operate at state-owned Jawaharlal Nehru Port Trust (JNPT).
Handling 66 million tons of cargo in the last fiscal year to March, JNPT is critical to India’s international trade. The port handles more than half of India’s traffic in shipping containers each year.
The probe was ordered as the CCI found merit in a complaint filed by Singapore’s PSA International, which alleged the rival duo had created barriers to hinder the growth of PSA’s terminal by colluding on certain charges they levy at the port.
Though the terminal operators handle each other’s containers to help boost the port’s efficiency, PSA had alleged that DP World and Maersk last year issued adviseries aimed at discouraging port users from sending PSA’s containers to their terminals.
In an order issued by the CCI on Jan. 15, the watchdog ordered Maersk and DP World units to withdraw those adviseries, saying it “smacks of anti-competitive” conduct.
The adviseries, if not withdrawn, would cause “irretrievable damage or losses” not only to PSA, and would not augur well for the port’s development, according to the order. It has not been made public.
“This is likely to generate unwarranted uncertainty, chaos, discontent and anxiety among shipping lines and customers,” the CCI said.
The order is only an interim measure, and the wider probe continues.
A DP World spokesperson said the company had not received any such order from the Indian watchdog, but it was “committed to ensuring” it complies with all laws.
A.P. Moller-Maersk, the world’s biggest container shipping group, did not respond to queries. PSA, which is owned by Singapore government-owned investment fund Temasek Holdings, declined to comment.
The antitrust dispute at the JNPT is based on so-called inter-terminal transfers.
Under the system, freight trains arriving at JNPT typically carry containers destined for several terminals, but stop at just one that handles all the cargo on a given day. Other operators then collect their containers by truck for loading at their own terminals. A similar procedure is followed, in reverse, when imported containers are unloaded.
DP World’s advisory had said the inter-terminal operations with PSA were “inefficient and unviable.” Maersk had said its terminal “shall not be responsible” for handling containers to and from PSA-terminal bound trains.
Both the companies denied PSA’s allegations while arguing to the CCI that the adviseries were based on “commercial justifications,” the order said.
Units of Maersk, DP World and PSA operate four of the JNPT port’s five terminals, with the fifth owned by the government. The PSA terminal, inaugurated in February, is planned to be the largest, expected to nearly double JNPT’s capacity.