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 user 2008-10-10 at 12:29:19 pm Views: 98
  • #20383
    Canon grabs U.S. distributor to counter Ikon deal
    oct 08- Japan’s Canon Inc acquired a small U.S. office equipment
    distributor and may snap up more to protect its market position after
    key distributor Ikon Office Solutions  was snatched out of its
    hands.Canon’s stock has tumbled sharply since late August after rival
    Ricoh Co (7752.T: Quote, Profile, Research, Stock Buzz) said it would
    buy Ikon for $1.6 billion, and aim to replace Canon products with its
    own printers and copiers in three to four years. [ID:nT32166]About 60
    percent of the products handled by Ikon are made by Canon, and analysts
    have warned the deal could deal a big blow to its position in the
    world’s largest office equipment market.

    Canon said it would buy
    Newcal Industries, a longtime distributor of its copiers, scanners and
    fax machines based in San Francisco, for an undisclosed sum. It added
    that it would look for further investments, spurred on by the Ikon
    deal.”Canon U.S.A. has been working on strengthening its direct sales
    and dealer sales network but Ricoh’s case accelerated our sales
    enhancement plan,” said a Canon spokesman who asked not to be
    identified.”We plan to invest funds and take various measures and the
    acquisition of Newcal is the first step of those measures.”Other rivals
    have also been aggressive in snatching up dealers to bolster their
    sales channels.

    Xerox Corp bought Global Imaging Systems for
    $1.5 billion in May 2007, while Konica Minolta Holdings earlier this
    year clinched a deal for Danka Business System’s U.S. operations.Canon
    will probably try to counter those moves by acquiring small
    distributors across the United States, an analyst said.”Canon will
    likely continue to purchase small and medium-sized dealers in each
    state given that the mega dealers have been already bought by others,”
    said Hisashi Moriyama, senior analyst at JPMorgan Securities Japan.

    Moriyama said it was unclear if Canon will be able to make up for what
    could be lost with Ikon going to Ricoh, and that deals like the
    acquisition of Newcal would not really help its faltering share
    price.The weakening U.S. economy and yen levels are bigger factors for
    its stock. Canon closed Wednesday down 3 percent at 4,220 yen, though
    it has clawed back 12 percent since sliding to a three-year low of
    3,770 yen last week.”The U.S. macro economy and forex movements are the
    most important external factors. Canon’s product lineup and
    cost-cutting efforts will also be key to the stock price,” Moriyama