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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 12, 1995
 
 
 
 
                           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
 
On January 12, 1995 Xerox Corporation (the "Company") and The Rank 
Organisation plc ("RO") announced the signing of a letter of intent for 
the Company to acquire 40 percent of Rank Organisation's financial interest 
in Rank Xerox Limited and related companies ("Rank Xerox").  Under terms of 
the agreement, the Company will pay Rank Organisation 620 million U.K. 
Pounds Sterling, or approximately $960 million, in cash, increasing the 
Company's financial interest in Rank Xerox to about 80 percent, from 
67 percent.
 
RO will transfer its interest in Rank Xerox to a new U.K. company which will 
be owned jointly by Xerox and RO.  RO will have a 60 percent and Xerox will 
have a 40 percent financial interest in the profits and dividends of the new 
U.K. company.
 
The Company estimates that the transaction will increase its earnings per 
share, will have a neutral to slightly positive cash flow impact in 1995, 
and will have a positive impact on cash flow going forward.
 
The transaction will have no effect on the operations of Rank Xerox and Fuji 
Xerox.
 
The Company believes that its increased financial interest in Rank Xerox 
will enhance shareholder value and improve its future earnings potential 
by expanding its economic presence in the global document processing market.  
The Company is optimistic about the potential for all of the Rank Xerox 
markets, including the markets in Eastern Europe, the former Soviet Union, 
Africa, China, India and the Pacific Rim through Fuji Xerox.
 
The transaction will be funded from cash flow, including the expected 
proceeds from the announced sale of Constitution Re Corporation,  and new 
borrowings, initially with commercial paper.  The Company has ample capacity 
within its U.S. revolving credit agreements aggregating $5 billion to 
support commercial paper borrowings.  The Company may subsequently fund out 
longer term a portion of the $960 million.  The Company does not intend to 
issue new equity to fund this transaction.  
 
This transaction results in goodwill of approximately $560 million.  The 
goodwill will be amortized over 40 years resulting in an annual PBT and PAT 
impact of $14 million.  Minorities' interest will decline by approximately 
$400 million.
 
The net effect of the increased debt and the reduced equity (minorities' 
interest) will increase the non-financing debt-to-capital ratio by 
approximately 9 percentage points.  Expected cash proceeds from the sale of 
Constitution Re, which will be used to pay down debt, will reduce the non-
financing debt-to-capital ratio by 3 percentage points.
 
The signing of the letter of intent has been approved by the boards of 
directors of Xerox and RO. It is anticipated that the transaction will 
close around the end of March, subject to the signing of definitive 
agreements and customary closing conditions.  The transaction must also be 
approved by RO shareholders.
 
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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
 
 
                                           Martin S. Wagner
                                           Assistant Secretary
 
Dated:  January 12, 1995

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