Xerox Holdings has finalized its acquisition of Lexmark International for $1.5 billion, a strategic move aimed at enhancing market value and creating synergistic growth.

The deal, which was announced just before Christmas 2024, officially took effect on July 1, 2025, and includes Lexmark's liabilities.

This acquisition comes as Xerox has faced revenue declines, including a 10% drop in 2024, making the merger a crucial step to bolster competitiveness against rivals like HP and Canon.

The primary objective of the acquisition is to accelerate innovation, scale operations, and expand the portfolio of office equipment available to customers.

Xerox expects the merger to generate approximately $240 million in cost synergies by the end of Year 2, enhancing operational efficiency through manufacturing consolidation.

With this merger, Xerox positions itself as a leading player in the printing market, ranking among the top five in all major segments and becoming a world leader in Managed Print Services.

The combined organization will serve over 200,000 clients across more than 170 countries, operating 125 manufacturing and distribution facilities in 16 countries.

There are currently no plans for job cuts or changes to Lexmark's operations in Central Kentucky, ensuring the company's continued presence in the region.

However, the merger does come with risks, including integration challenges of Lexmark's 3,000 employees with Xerox's 145,000, as well as potential geopolitical and cybersecurity threats.

Xerox CEO Steve Bandrowczak emphasized that the deal will enhance value for customers and partners by providing a broader range of printing solutions and managed print services.

Since the merger announcement, Xerox's share price has risen by 12%, reflecting market optimism regarding the potential benefits of the acquisition.

To finance the acquisition, Xerox utilized a combination of cash and loans, while also reducing its dividend payout to allocate funds for debt repayment.