HP and Xerox should merge and here’s why:
HP had split themselves into essentially a hardware company and a software company.
The hardware company sells printers, inks, etc. and has a fat profit margin but is slower growing.
The software company has a lower profit margin but is faster growing.
Xerox is splitting themselves into essentially the same thing, a hardware company and a software services company.
The hardware company has better profit margins but slower growth, and the software company has lower profit margins but faster growth.
This mirrors exactly what’s happening at HP.
If HP’s hardware company and Xerox’s hardware company merged, it would create synergies in both cost cuts from getting rid of redundant departments and an increase in profit margins because they can now buy even more raw materials in bulk.
If HP’s software company merged with Xerox’s software company, the same thing would happen.
Make it happen!