Xerox makes a bid to buy HP

Will HP soon be a subdivision of Xerox? Late Tuesday evening, the Wall Street Journal reported that Xerox is planning to make a cash-and-stock offer to buy the PC and printer maker. It's a strange move as Xerox is significantly smaller than HP. The latter has a market cap of $27.27 billion while Xerox has a market cap of just $8.05 billion.

A CNBC report mentions that Xerox reportedly has an informal funding commitment from a major bank. Cost-cutting is seen as the major incentive for the acquisition:

A spokesperson at HP said the company “doesn’t comment on rumors.” Representatives from Xerox were not immediately available to respond to CNBC’s emailed request for comments.

As both companies look to cut costs, sources told the Journal that combining the companies could save more than $2 billion in expenses.