Xerox has abandoned its hostile takeover bid for PC vendor HP, placing the blame for the failed effort on the coronavirus.
“The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc,” the company said in a Tuesday statement.
As a result, Xerox has withdrawn its $35 billion tender offer to acquire HP and nixed a plan to replace HP’s board of directors with its own nominees.
Only two weeks ago, Xerox had simply sought to suspend the acquisition attempts, not cancel them. However, the company’s stock has since taken a dive on the economic toll from the coronavirus pandemic, which could rage on for months.
“While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations,” the company added.
HP didn’t immediately respond to a request for comment. But the PC vendor opposed the proposed merger, citing Xerox’s sagging revenues and its decision to sell off a valuable stake in Fujifilm. In terms of revenue, Xerox is only one sixth the size of HP.
Despite today’s announcement, Xerox appears to be leaving the door open for a future hostile takeover attempt. “There remain compelling long-term financial and strategic benefits from combining Xerox and HP,” the company said in the statement, which goes on to claim that many HP stockholders supported the proposed merger.