Xerox buys colourful printing identity

Xerox buys colourful printing identity

Xerox and Tektronix last week announced an agreement under which Xerox will pay $US950 million in cash for Tektronix's Color Printing and Imaging Division. With the acquisition, Xerox hopes to challenge Hewlett-Packard's dominance in the colour-printing arena.

Xerox president and chief executive officer Rich Thoman, speaking at a press conference in New York via satellite from Tokyo, called the acquisition "another in a series of strategic moves to lead the digital-document marketplace.

"What makes this news so significant for Xerox is that colour is the most profitable segment of the office-printer market," Thoman said. "The bottom line is the marriage of complementary products, distributions, channels, people and technology."

Xerox will set up a new business unit adding Tektronix's colour-printing technologies to Xerox's existing black-and-white workgroup printer offerings. Tektronix's printer operations will remain based at the company's headquarters in Oregon, and Xerox plans to blend its own colour-printer operations, based in New York State, with Tektronix's.

Tektronix's 2400 colour-printer division employees will become Xerox employees once the transaction is completed, which is expected to happen within two months, according to the companies.

Gerald Perkel, president of Tektronix's Color Printing and Imaging Division, is slated to become president of the Office Printing Business in the Xerox Channels Group.

Xerox no longer sees colour printing as a niche area and is gearing up for an aggressive rollout of ground-breaking colour-printing products, said Anne Mulcahy, president of Xerox General Markets Operations, during the press conference.

"What interested us from the very beginning is the fact that [Tektronix] has set the pace for innovation in the colour marketplace," Mulcahy said. "Together, the two companies have now won more than 50 products awards and numerous vendor-of-the-year awards. Together, we'll offer seven workgroup colour-printing products under $5000 - more than any of our competitors."

The companies expect the acquisition to help Xerox become HP's strongest competitor in office colour printing. Tektronix's Phaser colour laser and solid-ink printers racked up close to $725 million in sales last year, according to the companies, and Xerox's distribution capacity is expected to rise to more than 16,000 resellers and dealers around the world - almost double the current number.

"It hasn't been easy for us to compete with HP, but we've shown that it can be done, and done successfully," said Perkel. "We've had some success, but we've fought a constant financial battle to compete with larger companies. Combining forces now with Xerox gives us the global reach and the support capabilities people want."

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