As part of a deal proposed in January, Xerox would first merge with a joint venture it operates with Fujifilm in Asia, and the Tokyo-based company would ultimately take over slightly more than 50 percent of the combined entity.
U.S. photocopier and printer maker Xerox on Sunday announced it was terminating a merger with Fujifilm and appointing a new chief executive after entering into a settlement with activist shareholders who had contested the takeover.
Xerox said it believes that the transaction can not reasonably be expected to be completed under these circumstances, particularly given that a court issued an injunction blocking transaction and that shareholders didn't support it on current terms, as well as unresolved accounting issues at Fuji Xerox.
The company said Chief Executive Officer Jeff Jacobson had resigned and that John Visentin was expected to be the new CEO.
The new Board of Directors plans to meet immediately and, among other things, begin a process to evaluate all strategic alternatives to maximize shareholder value.
Icahn said he was happy with the decision.
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As part of the settlement, Xerox and Icahn agreed to withdraw their board candidates from the upcoming shareholder meeting, and said the meeting would be postponed.
Icahn and Deason repeated their calls last week for Xerox to scrap the Fuji transaction, fire Jacobson, hire a new CEO, and have the board resign.
Mr Icahn welcomed the outcome, stating "we have been exceptionally delighted that Xerox lastly declared the ill advised strategy to seize charge of the business to Fujifilm".
The new CEO will be John Visentin. With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox. The move came after the deal prompted a proxy fight from Icahn and Deason, who argued that the merger terms undervalued Xerox.
As previously reported, past year Fujifilm discovered accounting irregularities within two subsidiaries of its joint-venture Fuji Xerox Australia New Zealand operations.
It comes after activist fund Elliott won weeks-long power struggle with Vivendi over Telecom Italia by wresting control of the company's board in early May.
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