Canon to Buy Océ

On November 16, The New York Times said Canon Inc. (Tokyo) will tender an offer worth $1.1billion for Océ (Venlo, the Netherlands), the biggest European printer maker. At $12.80 per outstanding Océ share – 70% higher than their price at the close on Friday — the all-cash offer values the Dutch company at nearly $1.1 billion.
Times writer Chris V. Nicholson quoted Océ CEO Rokus van Iperen as saying the new company a would create a “global combination” that would give Océ better access to markets while providing specific technology to Canon. He declined to comment on the possibility of other bids.
Iperen added that the management and board of Océ have lent their support to the proposal. He said the agreement preserves Océ’s independence and brand and also maintains current labor agreements.
In a limited, joint press release, both Canon and Océ said the agreement was pursuant to the provisions of Section 5 paragraph 1 and Section 7 paragraph 4 of the Dutch Decree on Public Takeover Bids (Besluit openbare biedingen Wft).
Canon’s President and COO Tsuneji Uchida said Canon and Océ aim to create a “number one” presence in the printing industry.
In the communiqué, the two companies said that they have “…reached a conditional agreement to combine their printing activities through a fully self-funded, public cash offer by Canon for all the Shares of Océ. The offer price of $12.8 per Share of Océ represents a premium of 70% over the closing share price of Friday 13 November 2009 and 137% to the average closing price of Océ’s Shares over the last 12 months. The Offer values 100% of the issued and outstanding Shares of Océ at approximately $1.1 billion.”
The integration of both Canon and Océ businesses will take place over the next three years.
The Times article said Océ, last month, reported a third-quarter loss of $37.4 million, 4% higher than a year earlier but in line with analysts’ expectations, because it had restructured costs of $47.8 million, stemming largely from layoffs. It added that Canon had faced similar market conditions for its copiers, but did report a profit of because of its camera sales, but sees a year-end profit of 64% less than last year.
Jan Hol, Océ’s Senior vp of corporate communications said the combination will provide Océ access to Canon’s sales and marketing network throughout Asia. Additionally, Océ will benefit from the Canon Group Best in Class processes and infrastructure as well as financing. Canon will benefit from the addition of Océ’s production and wide-format printing line-up, along with the R&D synergies made possible through joint development initiatives in these areas, he said.
Upon completion of the merger, Océ will remain a separate legal entity and will become a division within Canon with headquarters in Venlo (the Netherlands). Océ will be responsible worldwide for wide-format and commercial printing, as well as business services.
Over time, Canon’s large-format printing will be integrated in the Océ Production Printing Div., the communiqué said.
It added that Océ will report (managerial and financially) to the Canon Board and will lead the R&D and manufacturing for its businesses. The current Management Board and key management of Océ will remain in place. In the Océ division, the strong Océ brand name will be maintained and will be applied in all relevant markets. And, that both Canon and Océ customers will benefit from an enlarged range of high quality products and services through an extended global sales and service network.
The cash consideration is based on a 100% acceptance of Océ’s ordinary shareholders. The cash consideration for depository receipts for cumulative preference shares amounts to $97.2 million. Canon intends to refinance short and long term debt of Océ, as needed. Canon will finance the Offer and debt repayment from internally generated funds.