Japan's Ricoh to buy Ikon Office for $1.6 bln

By Kiyoshi Takenaka and Nathan Layne

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.