From Rueters -
"...Canon machines represent 60 percent of the products Ikon handles at the moment, with Ricoh machines accounting for 30 percent. But Ricoh said it aims to replace Canon products with its own printers and copiers in three to four years.
Analysts said the move could be a major blow for Canon in the world's largest office equipment market.
"Canon is now at risk of losing half of its copier sales in North America," UBS analyst Yoshitsugu Yamamoto wrote in a note to clients..."
Financial Times -
"...Canon has been hard-hit by consolidation within the US market for office equipment distribution, as competitors including Konica Minolta and Xerox have acquired key distributors and shaved down the network within which it can sell its products.
Shares of Ikon traded more than 9 per cent higher at mid-day on Wednesday at $16.99, below Ricoh’s $17.25 per share bid. The companies said Ricoh’s offer represeted a premium of one-third to Ikon’s average stock price over the past 60 days.
Copyright The Financial Times Limited 2008..."
Bloomberg - Aug 28"Canon lost 5.2 percent to close at 4,790 yen on the Tokyo Stock Exchange, the biggest decline since March 3. Ricoh added 2.9 percent to 1,777 yen, after gaining as much as 6.8 percent.
UBS AG said the acquisition may cause Canon's North America revenue to fall by as much as half, while Merrill Lynch & Co. estimates the company's overall sales would drop about 3 percent if it lost Ikon as a distributor. The purchase adds 400 sales locations for Ricoh in the U.S., Canada and Western Europe, markets that account for more than half of Canon's revenue.
``It is regrettable that Canon, which has over 450 billion yen ($4.1 billion) worth of treasury stock, chose not to acquire Ikon,'' Ryohei Takahashi, an analyst at Merrill in Tokyo with a ``buy'' rating on Tokyo-based Canon and Ricoh, wrote in a report yesterday. ``Canon looks set to lose market share.''
Richard Berger, a spokesman in Tokyo for Canon, declined to comment on whether the company was in talks to buy Ikon or would submit a bid.
``We plan to accelerate our strategies that enhance our commitment to independent distributors,'' Berger said."
And the list goes on...
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As "surprising" as this little announcement was, can anyone really believe that Canon didn't know it was coming. I mean, I gotta believe that BOTH Canon and Ricoh were approached by IKON; Canon probably before Ricoh.
Canon is big and can take a hit - like the one Xerox doled out with the Global deal - but TWO thumps?
Do they really think that "accelerating...strategies...to enhance...commitment to independent distributors..." is really going to work?
You can't make this stuff up, and if Canon decides to bid against Ricoh, what fun that will be to watch this fall.
Yum yum, delicious...
Look, there's more:
You missed one: About 25 percent of Ricoh's machines are sold through Ikon, compared with as much as 40 percent for Canon Inc., the largest Japanese office equipment maker, Cross said. Canon has lost about 50 percent of its U.S. sales network as the distributors have been bought by printer makers. http://findarticles.com/p/articles/mi_qn4176/is_/ai_n28040002
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