Xerox' ACS acquisition

For this very first post I chose to write about one of the main headlines from this Monday (28 sept): ACS takeover. Digital printer giant Xerox moved forward into business process outsourcing as it combined cash and shares in a £ 4 billion deal for Affiliated Computer Services earlier today. The acquisition, however, did not come as a total surprise. Financial media sources were already reporting in its morning editions this expected transaction. What did come as a shock though was that XRX shares fell by 14% at the New York Stock Exchange, which led to different writing views at the late night online editions of The Times, BBC and Financial Times.

The video below summarises the media's morning coverage of the story.

Noticeably, ACS takeover was foreseen to be another major transaction in the technology sector, following Perot Systems purchase last week. In its early updates, financial broadcasters seemed to be rather optimistic about Xerox' deal. Yet, this evening's release of the 3 sources I could find already shows different views of that.

Even though Xerox successfully launched its deal for ACS, it looks like it was not very clear for the Financial Times whether that is a clever move the companies. Its correspondents update was pretty pessimistic, in my opinion. They do mention in a few lines Ms Burns (chief executive of Xerox) ambition, but the majority of the article is dedicated to the writers' negative view of this deal, from the headline and first paragraph's description of the XRX shares today to a reminder of Xerox' difficult "transition to digital technology" and Deutsche Bank analysis by Mr Whitmore who defined the takeover as "lack of confidence".

In comparison to that, Times Online published a pretty objective article for this story, using clear statements for the facts surrounding this transaction. No evidences of bias in that, even after telling the shares' balance of the companies for today.

The BBC news website version of the story mainly matches the statements from the Times. On the other hand, it gave me the impression of a quite positive way of thinking of the takeover. The market data for XRX and ACS shares are only the final lines of the introduction, whilst most of the article is dedicated to the companies' possibly successful future plans and the greatness of the deal (including the headline).

Thus, after reading these articles my own opinion about this story is that it should be a smart move for both parties. For ACS as being taken over by a internationally respected company, especially when it comes to office solutions, which can grant global recognition for its products. As for Xerox, it is paving its post as a office-oriented giant, that follows technological giants Dell and HP recent transactions to increase annual revenue and spread its offers to wider range of clients. The initial outcome may not be the best for the acquisition (as XRX shares showed this Monday), however in the long term a combination of business process outsourcing and Xerox' expertise and prestige sounds pretty positive to me.

Financial Times:

http://www.ft.com/cms/s/0/e2a14ed4-ac26-11de-950b-00144feabdc0.html

BBC News:

http://news.bbc.co.uk/1/hi/business/8278713.stm

The Times:

http://business.timesonline.co.uk/tol/business/industry_sectors/support_services/article6852432.ece