HP Inc.’s board is still deliberating over a $33 billion takeover proposal from Xerox Holdings Corp., people familiar with the matter said, adding uncertainty to a potential blockbuster deal that would reshape the printing industry.

HP’s board is trying to create the most value for shareholders and isn’t yet convinced a sale to Xerox is the right move, said the people, who asked not to be identified discussing HP’s private deliberations. The board doesn’t feel any pressure to respond quickly, the people added. Xerox wants to receive an answer within a week to the $22 per share cash-and-stock offer made Tuesday, according to people familiar with Xerox’s thinking.

Palo Alto, California-based HP confirmed in a statement Wednesday last week that it had received an offer, but didn’t comment on its level of support for a combination. The second-biggest maker of personal computers pledged to do “what is in the best interest of all our shareholders.”

HP, one of the world’s largest printer makers, and Xerox, one of the biggest sellers of photocopiers, are struggling as waning interest in office and consumer printing has blunted both companies’ most profitable businesses. HP also has contended with a stagnant PC market.

Both hardware makers have responded to the changing markets by cutting costs. HP’s new Chief Executive Officer Enrique Lores announced another restructuring that could remove as much as 16% of the workforce by the end of fiscal 2022, amid falling sales in its lucrative printer ink business. Xerox said it plans to cut $640 million in expenses this year. The copy-machine company, based in Norwalk, Connecticut, expects a combined Xerox-HP entity could save at least $2 billion in expenses, the people said.

Xerox began building the business case for an HP acquisition months ago, said the people, who asked not to be identified discussing the strategy. The company sees a combined entity having enough market share in printers and photocopiers to rival Canon Inc., which has a significant presence in both markets, they said. Ricoh Co., another Japanese company, would be another major rival.

With the unwinding this week of its half-century long joint venture with Fujifilm Holdings Corp., Xerox has lost a major distribution channel in Asia. HP has a large presence in Asia and can give Xerox a sales organization across the region, the people said. Xerox expect its dedicated sales staff for small and mid-sized businesses in the US can help boost HP product revenue. A combined company would be able to sell or offer a subscription, for example, to Xerox photocopiers, HP printers and personal computers to those customers, the people said.

A Xerox spokeswoman didn’t immediately respond to a request for comment. An HP spokeswoman declined to comment. — Bloomberg

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