Xerox inches closer to completing HP acquisition following funding commitment

Following the news that Xerox Holdings Corporation has received US$24bn funding commitments for the acquisition of HP;

Aurojyoti Bose, Lead Analyst at GlobalData, a leading data and analytics company, offers his view:

“After months of uncertainty, Xerox has moved towards its acquisition bid for HP. Xerox has confirmed US$24bn funding commitments from Citi, Mizuho and the Bank of America, thereby putting an end to doubts regarding Xerox’s ability to raise the required capital to close such a big deal. It is also one of the largest bridge loans for a technology firm and can possibly pave way for similar high value merger and acquisition (M&A) transactions in 2020.

“Through this loan, Xerox has managed to remove one of the major roadblocks in execution of the deal, which was previously rejected by HP’s board of directors citing undervaluation, poor top-line performance of Xerox and doubting its ability to raise the required capital to close the deal. Carl Icahn, who holds a 4.24% stake in HP, is in favor of the merger.

“HP shareholders and board of directors are likely to rethink the potential merger, and financial backing from three major financial services firms showcases confidence in potential of the combined entity.”

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