Canon has announced its intention to buy Oce with a 730 million euro tender for the Dutch based printer and copier manufacturer. The move is a crucial part of Canon’s plans to increase its market share for imaging products and printers and to challenge Ricoh’s position as the world’s largest copier manufacturer. Canon is the world’s largest manufacturer of digital cameras and is currently the third largest in the copier market, behind Ricoh and Xerox.
Oce is the largest European printer manufacturer, specialising in high-end production machines and large printers for the advertising and marketing industries. Canon’s strength is in smaller home/ office printers and low- to mid-range production machines, so the acquisition of Oce will give Canon access to a previously untapped market.
Tsuneji Uchida, Chief Operating Officer for Canon said,
Through the merger of Canon and Oce, we believe that we will be able to realise clear benefits, not only in the area of R&D, but also in terms of product mix and marketing, and are confident that this winning combination will contribute greatly to our goal of becoming the overall number one presence in the printing industry.
The merger continues a trend towards consolidation in the printing industry, with size being the key to generating the revenues needed to invest, expand and survive. Even with sales of 2.9 billion euros in 2008, Oce is no longer large enough to survive on its own and made a loss in the last two quarters.
Oce’s presence in non-European markets is limited so the acquisition will ensure, not just its survival but its expansion, particularly into Asia.
Oce’s CEO, Rokus van Iperen said,
This is the best possible combination in the consolidating global printing industry, and it will deliver scale in R&D, manufacturing and distribution.
The combined organisation provides us with access to a huge sales network in Asia, as well as mutual cross selling opportunities in Europe and the US.
Although the deal has been welcomed by both companies and, in particular by Oce’s shareholders, nothing has been finalised and there is always the possibility of a rival bid from another printing company, with Hewlett-Packard, Kyocera, Toshiba and Konica Minolta the most likely to launch a counter bid.
In the short term, the deal will undoubtedly benefit Oce’s shareholders and should consolidate Canon’s position in the market place – whether it will be enough to propel Canon into the number one spot remains to be seen.
by Anthony Morgan