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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
January 18, 1996
XEROX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
800 Long Ridge Road
P. O. Box 1600
Stamford, Connecticut 06904-1600
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(203) 968-3000
This document consists of 3 pages.
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Item 5. Other Events
Registrant today announced agreements to sell all of the
remaining insurance units of Talegen Holdings, Inc., the
property/casualty insurance group, a wholly-owned indirect
subsidiary of Registrant ("Talegen"), for a total of $2.7
billion to investor groups led by Kohlberg Kravis Roberts &
Co. and existing management. Consideration will consist of
cash, securities, performance-based instruments and the
assumption of Talegen debt.
The agreements were approved by Registrant's board of
directors in a special meeting Wednesday and are subject to
regulatory approvals and customary buyer financing and
closing conditions.
Registrant announced in January 1993 that it would disengage
from its insurance and other financial services businesses.
The sales of the Talegen units will, on closing, effectively
complete Registrant's strategy to exit financial services.
These transactions will significantly reduce Registrant's
debt, strengthen Registrant's financial position and allow
Registrant to focus its resources on its core document
processing business.
The sales, expected to close in the middle of this year,
will consist of two concurrent transactions totaling $2.7
billion:
- -- for the four Talegen insurance operating units and
related service companies: approximately $1.3 billion in
cash, $450 million in preferred stock in a new company
formed by the KKR group and $360 million of debt to be
assumed or refinanced by the buyers, and;
- -- for The Resolution Group, the unit that manages
Talegen's run-off businesses: approximately $150 million
in cash and $462 million in performance-based
instruments issued by another company formed by the KKR
group.
Registrant will continue to provide excess-of-loss
reinsurance through Ridge Reinsurance Limited ("Ridge Re")
to the Talegen units, unchanged from coverage in place since
1992. Ridge Re is a wholly-owned indirect subsidiary of
Registrant that provides reinsurance coverage to current and
former Talegen units.
In a separate transaction, Registrant announced an agreement
to sell the remaining portion of First Quadrant Corporation,
an asset management subsidiary of Talegen, to Affiliated
Managers Group ("AMG"). This transaction, expected to close
in the first quarter, is also subject to regulatory
approvals and customary closing conditions. AMG, located in
Boston, is a private holding company with investment
affiliates.
In connection with the Talegen sales, Registrant will record
an after-tax charge of approximately $1.5 billion for the
fourth quarter of 1995, consisting of a non-cash loss on the
sales of approximately $975 million and $525 million
primarily to cover additional Talegen loss reserves and all
estimated future expenses associated with the excess-of-loss
reinsurance coverage to Talegen. Effective with the issuance
of the 1995 financial statements, insurance operations,
including the $1.5 billion charge, will be treated as
discontinued operations and all prior periods will be
restated.
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The insurance operations being sold consist of five
independent insurance groups and three insurance-related
service companies. In 1995, Registrant sold three Talegen
units: Constitution Reinsurance Corporation for $421
million; Viking Insurance Company of Wisconsin for $103
million; and the insurance segment of First Quadrant.
Including these sales, Registrant will have received a total
of $3.3 billion for Talegen.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, Registrant has duly authorized this report to be
signed on its behalf by the undersigned duly authorized.
XEROX CORPORATION
By: MARTIN S. WAGNER
Assistant Secretary
Dated: January 18, 1996
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