1. Discuss the advantages and disadvantages of Xerox’s intention to operate ACS as a standalone business. As an investment banker supporting Xerox, would you have argued in support of integrating ACS immediately, at a later date, or of keeping the two businesses separate indefinitely? Explain your answer.
2. How are Xerox and ACS similar, and how are they different? In what way will their similarities and differences help or hurt the long-term success of the merger?
3. Based on your answers to questions 1 and 2, do you believe that investors reacted correctly or incorrectly to the announcement of the transaction?

In anticipation of a shift from hardware and software spending to technical services by its corporate customers, IBM announced an aggressive move away from its traditional hardware business and into services in the mid-1990s. Having sold its commodity personal computer business to Chinese manufacturer Lenovo in mid-2005, IBM became widely recognized as a largely “hardware neutral” systems integration, technical services, and outsourcing company.