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Apex-Lexmark merger approved by US regulator

October 3, 2016

The Committee on Foreign Investment in the United States (CFIUS) has approved the merger, leaving only the Chinese government to approve the deal.apexlogo

Lexmark revealed earlier this year that the merger had been approved by its shareholders at a special shareholder meeting, where 70 percent of the “outstanding Lexmark shares were voted”, and of those that did, 99 percent “voted in favour of the merger”.

It added however that the merger “remain[ed] subject to certain regulatory approvals”, such as the CFIUS, as well as “other customary closing conditions”. Now, Lexington Herald Leader has reported that the CFIUS has approved the merger, with Lexmark’s stock price having “surged” after the announcement late last week.

The clearing of the USA “government hurdle” means that the merger only now needs to “receive approval from the Chinese government”, but this is “anticipated by the end of 2016”, according to the US Securities and Exchange Commission. Lexmark’s stock price closed at $39.96 (€35.55) on Friday, an increase of $4.83 (€4.29) or 13.75 percent per share, a long way up from its yearly low of $24.11 (€21.45).

LexmarkLogo_RGB_300The merger is expected to be completed in the second half of the year, despite The Recycler reporting earlier this year that Lexmark employees were attempting to block the deal. The OEM had also previously discussed the merger and what it meant, while a host of law firms had started investigations into the deal.

Sources later stated that the Chinese company aims to “shop” Lexmark’s software business after its merger goes through, with “people with knowledge of the matter” adding that Apex and PAG Asia Capital are “already exploring a sale” of Lexmark’s software division, and are said to be “in talks with a number of private equity firms”.

The sources, who “asked not to be identified because the information is private”, added that the new owners “are not using an external adviser to sell the software unit”, which could reach as much $1 billion (€888.4 million) in sales value.

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