By Micah Maidenberg

The HP Inc. board said Xerox Holding Corp.'s efforts to merge the two companies are not appropriate as the coronavirus crimps economic growth.

"Any complex, large-scale, highly leveraged transaction in the current economic environment could be disastrous for HP, its shareholders and our entire ecosystem," the company's board said in a letter to shareholders Wednesday.

Xerox said on March 13 that it would pause its campaign to take over HP, postposting presentations and meetings with shareholders as it focused on responding to the pandemic.

Xerox wants to combine with HP in a proposed $35 billion deal, but HP has said the bid would benefit Xerox shareholders more than its own.

It also has said Xerox doesn't have enough operational experience in HP's markets, including home printing and digital manufacturing.

The two companies both focus on printing, but in different areas of that sector, with Xerox known for its large printers and copy machines.

Xerox believes a deal would yield a combined company that is able to deal with falling demand for printed documents and has touted cost savings.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

March 25, 2020 16:56 ET (20:56 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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