Fuji Expected to Buy Half of Xerox Venture Stake

Fuji Photo Film Co., Japan’s biggest photo film maker, probably will announce today that it will buy half of Xerox Corp.’s 50% stake in their 39-year-old Japanese joint venture, an industry source said.

The imminent deal, which media reports said probably would be valued at $1.5 billion, offers a lifeline to the struggling U.S. copier maker, which in October promised to sell $2 billion to $4 billion in assets to cut its $17 billion corporate debt.

A Fuji Photo spokesman said no decision had been made on whether to buy part of Xerox’s stake in the equally owned venture, Fuji Xerox, although Xerox had said in October it would seek to sell half its stake to its Japanese partner.

Xerox’s share price has risen nearly 20% since a media report Friday that a deal was imminent. It closed Monday up 6 cents at $6.76 on the New York Stock Exchange. Fuji Photo’s shares also gained more than 6% on Monday.

As part of its plan to raise cash, Xerox also said in December it will sell its operations in China for $550 million in cash to Fuji Xerox.

Japanese business daily Nihon Keizai Shimbun said today that Fuji Photo was already jointly working with Fuji Xerox to develop printers for digital cameras, an area in which it lags rivals such as Canon Inc. and Seiko Corp. unit Seiko Epson Corp.

The paper added that Fuji Xerox, with revenue in the business year to December 1999 of $7.3 billion and a net profit of $101.1 million, was Japan’s third-largest supplier of copiers with a 20% market share.

The Fuji Photo spokesman declined to comment on whether the two companies were cooperating in printer development.

Fuji Photo has become one of Japan’s biggest suppliers of digital cameras, with plans to expand its production base to 5 million units in the next business year, the spokesman said.

The Nihon Keizai said Fuji Photo would hold a board meeting to decide on the acquisition plan and announce a decision later.