Canon seeks printer power with $1.1 billion Oce bid

By Kiyoshi Takenaka and Gilbert Kreijger

TOKYO/AMSTERDAM (Reuters) - Japan's Canon (7751.T) plans to buy Dutch copier and printer maker Oce (OCEN.AS) for 730 million euros ($1.1 billion), in a challenge to rivals Ricoh (7752.T) and Xerox (XRX.N) in the hunt for growth.

Canon, the copier and digital camera maker, and Oce said in a joint statement Monday that Canon would offer 8.60 euros per share, or 730 million euros, for Oce's shares, a premium of 70 percent to Oce's Friday close.

Canon's offer comes a little over a year after Japanese rival Ricoh, the world's largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, dealing a blow to Canon which provided 60 percent of the products Ikon handled.

Canon, the world's largest digital camera maker which derived 65 percent of 2008 sales from printers and copiers, Oce, and rivals have suffered from the economic slump forcing companies to cut office costs.

Oce, loss-making in the past two quarters, has been cutting costs and staff and paid no final dividend in 2008. Canon and Ricoh reported sharp falls in quarterly profit last month.

Canon and Oce products have little overlap, with the Japanese company strog in regular office machines and mid- to lower-end production printers while Oce excels in high-end and advertisement-use large-sized printers, Canon said.

Production printers, or digital commercial printers, can produce manuals and direct mail items quickly and in large volume and are a fast-growing segment of the global market.

"Oce is too small to survive on its own. Due to the capital intensity you need scale, which Oce lacks," RBS analyst Wim Gille said in a note.