Xerox
The merger, or lack of one, of these two companies is no guarantee of either's success. Xerox has been trying to shed its non-core assets in recent years as the enterprise copier market falters. HP is in a similar position, with sales of its consumer printers and copiers declining as people opt for a more digital way of providing information. HP recognizes that reorganizing under the Xerox umbrella is a way of helping both companies and analysts are expecting a counter-offer that would better reward HP shareholders in the buyout. With this in mind, Xerox expects a cost savings of $2 billion each year from a merged company, which is a significant improvement considering the combined market caps of both companies are less than $50 billion.
One of the biggest individual influences in the buyout talks between Xerox and HP is major investor Carl Icahn. The New York billionaire owns more than 10% of Xerox and almost 5% of HP and is heavily invested in the fate of this merger as a result. This is another attempt by Icahn to assist a smaller company in acquiring a larger one, like the leveraged buyout of Caesars Entertainment
HP still has time to make a counter-offer, but there is still considerable uncertainty surrounding the ability of the companies, combined or not, to succeed in a changing business environment.