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Xerox considering bid for fellow fading tech giant HP, according to report

HP’s office complex in Palo Alto, California. Hewlett-Packard was the original king of Silicon Valley.
HP’s office complex in Palo Alto, California. Hewlett-Packard was the original king of Silicon Valley. Photograph: Justin Sullivan/Getty Images

Xerox is reportedly considering a bid for HP, a move that would unite two fading stars of technology that have struggled to keep up in the digital age.

According to the Wall Street Journal Xerox is weighing a cash and stock offer for HP, currently valued at $27bn, more than three times as much as Xerox itself.

The deal – which appears to be in very early stages – would unite two famous brands that have suffered as consumers and businesses have moved away from printed documents. Xerox became a verb after introducing its copying machines in the late 1950s. But as the world moved online, and Google was added to the lexicon, Xerox struggled. Some 900 jobs were cut last October after a proposed merger with Fujifilm soured.

On Tuesday a $1bn lawsuit filed by Fujifilm against Xerox was dismissed and Xerox announced it would sell its stake in a joint venture between the two companies for about $2.3bn.

A merger would mark the latest chapter in the decline of two companies that once dominated their industries and helped create today’s tech sector.

HP, formerly known as Hewlett-Packard, was the original king of Silicon Valley. Started by Bill Hewlett and David Packard, in a one-car garage in Palo Alto, California, HP became the world’s largest PC manufacturer.

The company’s management style – called the HP Way – became a model for Silicon Valley and was based on a model of open communication, teamwork and innovation. Its founders were a major influence on Apple’s Steve Jobs, who landed a summer internship with the company when he was 12 years old.

HP, which is still a major PC supplier and makes smaller printers, was split from Hewlett Packard Enterprise, which sells servers and data storage, in 2015.

HP once relied on selling printers at a loss and making the money back by selling ink cartridges but as people print less the model has become strained. In October HP announced it was laying off as many as 9,000 people.

Xerox’s share price has been on a winning streak – nearly doubling in the last year – thanks to its cost-cutting programme. Shares rose 2.53% on the news on Wednesday. Xerox’s share price has fallen about 10% over the year but rose over 9% in morning trading.

• This article was amended on 7 November 2019 because the garage where Bill Hewlett and David Packard started Hewlett-Packard is in the California city of Palo Alto, not in San Mateo as an earlier version said. This has been corrected.

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