FRANKFURT - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.
Japan's Ricoh to buy Ikon Office for $1.6 bln
TOKYO (Reuters) - Copier and printer maker Ricoh Co Ltd (7752.T) will acquire U.S. office equipment distributor Ikon Office Solutions IKN.N for $1.62 billion, in what could be a blow to rival Canon Inc (7751.T) in the key U.S. market.
Ricoh, which competes with Xerox Corp (XRX.N), Canon and Konica Minolta Holdings (4902.T) in printers and copiers, said it would pay $17.25 cash for each Ikon share, a premium of 11 percent to Tuesday's close of $15.56.
Following the announcement, shares in Ikon traded up 9.4 percent at $17.02 in New York.
Canon machines represent 60 percent of the products Ikon handles at the moment, with Ricoh machines accounting for 30 percent.
But Ricoh aims to replace Canon products with its own printers and copiers in three to four years, Chief Financial Officer Zenji Miura said.
The deal, Ricoh's largest corporate acquisition ever, is the latest in a string of overseas acquisitions by financially sound Japanese companies hunting for opportunities outside their mature home market.
Already this year, outbound acquisitions from Japan total $39 billion, according to Thomson Reuters data, nearly doubling the figure for all of 2007.
"Ikon operates more than 400 sales and services locations mainly in Europe and the United States. It has long and established business ties with many major customers in the U.S.," Ricoh President Shiro Kondo told a news conference on Wednesday.
"By combining the strengths of Ikon and Ricoh, we can create a strong business entity."
Office equipment makers have been snapping up distributors to strengthen their sales channels and product offerings.
Xerox bought Global Imaging Systems for $1.5 billion in May 2007, while Konica earlier this year clinched a deal for Danka Business Systems' DNK.L U.S. unit to boost its sales in the world's largest office equipment market.
Mizuho Securities analyst Ryosuke Katsura said the deal was a step in the right direction for Ricoh, but it might face challenges in retaining Ikon's customers and employees, which are important to its competitiveness.
"Some of its clients may want to keep using Canon products, and they might switch to a Canon distributor or to direct purchases from Canon," Katsura said.
"On Ikon employees, they have been handling many Canon products and have wide knowledge on Canon machines. Some of them could move to dealers that offer Canon products."
Ricoh said in a statement that the deal had been approved by the boards of both companies but is subject to regulatory approvals in the United States, Canada and Europe.
The Japanese company will finance the transaction mainly with external funding, CFO Miura said.
Potential options include corporate bonds, bank borrowings and equity financing, but Ricoh may depend chiefly on bond issuance, he said.
Ricoh expects the deal to close in the fourth quarter of 2008.
The Tokyo-based company has been using acquisitions to expand outside Japan, which provides about half its revenues. Ricoh said in January 2007 it would pay $725 million to buy IBM's (IBM.N) digital commercial printer business.
Digital commercial printers are used to print big documents such as product manuals and direct mail quickly and in large volumes, and are one of the fastest-growing segments of the office equipment market.
Goldman Sachs (GS.N) is Ikon's financial advisor on the deal while Morgan Stanley (MS.N) is advising Ricoh.
(Editing by David Cowell)
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