Xerox is buying printer maker Lexmark from Chinese owners in a $1.5 billion deal, Reuters reports

(Reuters) – Office equipment maker Xerox (NASDAQ:) will buy Chinese printer and printing software maker Lexmark International in a $1.5 billion deal to bolster its core business, the companies said on Monday.

Lexmark returns to US ownership through the purchase of Ninestar Corp, PAG Asia Capital and Shanghai Shouda Investment Center. Shaped out IBM (NYSE:) in 1991, Lexmark was sold to a group of Chinese investors in 2016 for $3.6 billion.

Xerox, a household name around the world, posted five straight quarters of declining revenue as demand for printers and related equipment faltered in the digital age. The company also faces strong competition from HP (NYSE:) and Canon, among others.

Its shares, which have fallen more than 50% this year, were trading nearly 5% higher in premarket trading.

The Lexmark deal, which includes its debt, will give Xerox much-needed scale to better compete. The combined company is expected to serve more than 200,000 customers in 170 countries and have market share among the world’s five largest companies in various printing segments.

The deal would also allow Xerox to expand its presence in Asia Pacific while strengthening its ability to capture customers in the expanding A4 segment, which includes small-format printers and copiers commonly used in homes and offices.

Xerox expects to fund the deal, which is expected to close in the second half of 2025, with a combination of cash and debt.

As part of the financing, Xerox will cut its annual dividend from $1 to 50 cents per share, starting with the dividend expected to be announced in the first quarter of 2025, to support its debt reduction efforts.

Xerox announced in October that it would buy ITsavvy, an Illinois-based IT products company, for $400 million to expand its IT services business.