Fujifilm Holdings, a Japan based imaging and photography company of the Fujifilm Group, has reportedly announced plans to end its Xerox sales partnership in 2021. Fuji Xerox, a subsidiary of Fujifilm, notified United States based Xerox that it will not renew a contract specifying trademark rights and regional sales boundaries between the two companies.
Fujifilm announced its plans about the breakup on Monday. The share price of the company fell more than 2% while trading on the Tokyo Stock Exchange, with concerns that tough competition with its partner turned rival might hurt the sales.
The relationship between the two soured soon after the Japanese side announced an unsuccessful bid for Xerox in 2018.
The withdrawal of Fuji Xerox from the contract would lead to it losing the right to use the Xerox brand. It will be selling business machines across the globe under a brand new name, tentatively called Fujifilm Business Innovation, which will be effective from April 2021. Meanwhile, Xerox will now be able to enter growing Asian markets. The contract is set to expire in 2021.
Fujifilm concluded a deal with Xerox stating that it will now turn Fuji Xerox into a fully owned subsidiary by buying 25% stake owned by the American company in the long-standing JV. The agreement ended with a dispute between the two companies over the attempt for acquisition.
During that time, Kouichi Tamai, President, Fuji Xerox reportedly stated that they expected the partnership to continue. But due to further developments like the Xerox bid to takeover HP at the end of last year, convinced the Japanese company to change its strategy.
According to reliable sources, the total combined global market share for the two companies was 16.6% in A3 laser multifunction printers, placing them in the third position after Ricoh and Canon of Japan.
The accounts of Fuji Xerox represents approximately 9% points of their combined share, whereas Xerox accounts for over 7 points, both selling office equipment under the Xerox brand. The termination of sales partnership would further deteriorate a partnership that dates back to 1962, when the two companies had first established the Fuji Xerox JV. Meanwhile, Fujifilm would continue to manufacture Xerox based branded products.