The proposed takeover had involved a $30 billion tender offer and a bid to seize control of HP's board, The Wall Street Journal first reported.
But the coronavirus pandemic and resulting market turmoil derailed the debt-heavy merger, Xerox confirmed in a press release.
"The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc. Accordingly, we are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s Board of Directors," the company wrote. "While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations."
Shares of Xerox Holdings were flat in after-hours trading Tuesday, while HP Inc. dropped about 1.6% in the extended session.
Xerox initiated the takeover bid late last year.
In the intervening months, the two firms went back and forth acrimoniously on terms of the deal prior to the pandemic triggering widespread economic turmoil in the U.S. and worldwide.