COMPANY PRESS RELEASE: Xerox Corporation and Flextronics has announced the completion of the first in a series of asset sales to transfer Xerox’s office product manufacturing operations to Flextronics.
The companies completed the sale of Xerox’s plants in Toronto; Aguascalientes, Mexico; and Penang, Malaysia to Flextronics for $118 million plus the assumption of certain liabilities. The approximately 2,545 current Xerox employees in these operations transfer to Flextronics.
In September, Xerox and Flextronics announced a manufacturing agreement that includes payment to Xerox of about $220 million for the sale of inventory, property and equipment as well as a five-year contract for Flextronics to manufacture certain Xerox office equipment and components. In addition to the sale of Xerox’s operations in Toronto, Aguascalientes and Penang, the company is selling to Flextronics its office manufacturing operations in Resende, Brazil and Venray, The Netherlands.
The asset sales recently announced mark the beginning of a one-year transition period for Flextronics to assume manufacturing of Xerox-designed office products and related components. Flextronics will also begin the manufacturing of some Xerox electronic parts and subsystems during the first half of 2002. Xerox will continue to strengthen its manufacturing competencies in high-end production printing and publishing equipment, toner and imaging supplies through its remaining global manufacturing plants.
Xerox had previously received portions of the $118 million from this first set of asset sales and expects to receive today the remaining payment. Additional cash proceeds from the agreement will be received in phases as the companies finalize the other sales, subject to the completion of certain regulatory and other requirements.