Canon and Océ have reached 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 € 8.60 per Share of Océ (the "Offer") 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 € 730 million. Canon and Océ aim to create the overall No. 1 presence in the printing industry, building on an enhanced scale and a combined history of innovation and excellent client servicing.
The combination will capitalise on an excellent complementary fit in product mix, channel mix, R&D, and business lines resulting in an outstanding client offer spanning the entire printing industry.
Canon's President and COO Tsuneji Uchida says: "We are delighted to welcome Océ, the ideal partner in every respect, into the Canon Group.
"Through the merger of Canon and Océ, we believe that we will be able to realise clear benefits, not only in the area of R&D, but also in terms of product mix and marketing and are confident that this winning combination will contribute greatly to our goal of becoming the overall No. 1 presence in the printing industry."
Océ's CEO Rokus van Iperen says: "I am very much looking forward to joining forces with Canon. There is a great fit between our companies, which share similar values and a strong commitment to technology and innovation.
"I am proud Canon intends to team up with Océ, based upon the prominence of our customers and technology and of course our people that have shaped our company for generations.
"This is the best possible combination in the consolidating global printing industry and will deliver scale in R&D, manufacturing and distribution.
"The combined organisation provides us with access to a huge sales network in Asia as well as mutual cross selling opportunities in Europe and the United States.
"Our customers will benefit from an outstanding product and services offering and our employees will be offered appealing development opportunities."
Strategic rationale
Canon and Océ will be able to build upon each other's strong history and proven track record of innovation and customers servicing and create a strong joint enterprise capable of long term successes. The similar technology oriented background and corporate values will be important drivers creating the world's leading group in the printing industry.
Canon and Océ have similar backgrounds in corporate values with a client oriented culture and a technology driven business model.
Océ, one of the world's leading providers of document management and printing for professionals, brings to the merger its expertise and strengths in the areas of production printing, wide format printing and business services.
Océ's strategy focuses on strengthening its distribution power, increasing product competitiveness and improving operational excellence.
The combination will provide Océ access to Canon's well-established sales and marketing network throughout Asia.
Additionally, Océ will benefit from the Canon Group Best in Class processes and infrastructure as well as financing to facilitate active investment toward the expansion of Océ's business operations. The combination of Canon and Océ will have leading positions in the SOHO (Small Office/Home Office), office, production and wide format segments, offering a superlative range of products and services.
It would be able to provide optimal customer servicing through its enhanced scale, innovative technologies and strong distribution networks. Océ and Canon have complementary technologies and products and would benefit from improved diversification across regions and businesses.
Under Phase III of its Excellent Global Corporation Plan, launched in 2006, Canon aims to join the ranks of the world's top 100 companies in terms of all key measures of business performance.
As a principal strategy toward the realization of this goal, Canon aims to achieve the overwhelming No. 1 position worldwide in all of its current core businesses.
Océ boasts a robust direct sales and service network in 32 countries, which will provide valuable additional sales and service support for Canon-brand products.
Furthermore 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.
The printing industry currently is in a period of consolidation, driven by the undeniable fact that scale is increasingly important, especially in R&D and manufacturing.
Only players that are able to improve profitability through increased scale and Best in Class processes and infrastructure will play a leading role in the printing industry going forward.
In this perspective, Canon and Océ form the ideal combination. Together they are excellently positioned to optimise the servicing of their customers and become the undisputed market leader.
Océ's position in the combination
Following the 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, commercial printing and business services. Océ's office activities will be integrated in Canon's Office Imaging Products division ("OIP").
Canon's Large Format Printing will functionally be integrated in the Océ Production Printing Division ("Océ division") over time.
In order to create optimal scale in the right segments, the Océ division will report (managerial and financially) to the Canon Board and will lead the R&D and manufacturing for its businesses.
Furthermore, Océ's headquarters, combining R&D, production and sales functions, is expected to play an integral role for Canon's European regional operations, one of Canon's key bases within its Three Regional Headquarters vision. T
he 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.
Corporate governance
Following completion of the Offer the Management Board of the Océ division will consist of the following persons: Messrs. Van Iperen, Kerkhoven and Schaaf.
Océ's Supervisory Board will include the following persons: Messrs. Tanaka, Elverding and Baan, as well as three additional persons to be selected among Canon's top executives.
Integration phase The integration of both Canon and Océ businesses will take place over the coming 3 years. Canon and Océ have agreed on a high level integration plan and integration project organisation.
The integration will be aimed to optimise efficient coordination of Sales, Service, Marketing, R&D and Manufacturing & Logistics covering all business areas, the process of which will be directed and supervised by a Steering Committee composed of executives from Canon and Océ.
The Sales and Service integration will be led by joint integration teams per region with initially two dedicated organizations, respectively for the OIP and for the Océ division.
Social aspects
The Océ employees will become part of a global leader in the printing industry which will capitalize on the strong brands of both companies.
Océ and Canon do not expect that there shall be any material negative consequences as a result of the Offer for the existing employment level of Océ, excluding already announced personnel reductions. The combination will respect the existing rights of the employees of Océ, including applicable covenants with the Océ works councils and the unions, the applicable social plans and collective labor agreements.
The combination will also respect the current obligations with respect to the pension rights of Océ's employees.
Customers
The customers of both Canon and Océ will benefit from an enlarged range of high quality products and services through an extended global sales and service network.
Business Partners Océ will carefully explore with its various business partners the future of their relationship in view of the contemplated transaction.
Major points
- Canon and Océ aim to create the overall No. 1 presence in the printing industry;
- Combination to capitalise on excellent complementary fit in product range, channel mix, R&D, and business lines resulting in an outstanding client offer;
- Strong strategic rationale for Canon and Océ - growing and building on proven track record in innovation and client servicing;
- Canon intends to make an offer of € 8.60 per Share (cum dividend) for 100% of the outstanding Shares of Océ, representing a premium of 70% over Océ's closing share price of Friday 13 November 2009 and 137% to the average share price over the last 12 months;
- The Management and Supervisory Boards of Océ fully and unanimously support and will recommend the intended Offer;
- Holders of the depository receipts for Océ's cumulative preference shares, Ducatus, ASR and ING (approximately 19% of the total share capital), agreed to sell their interests to Canon;
- large shareholder Bestinver Gestion S.A. (approximately 9.5% of outstanding Shares) has provided an irrevocable undertaking to tender;
- Océ remains separate legal entity as a Canon division, headquartered in Venlo (the Netherlands);
- Océ brand is to be maintained and applied in all relevant markets. Océ to lead its R&D and manufacturing. Management Board and key management remain in place;
- Employees part of industry leader - existing labor agreements will be respected, no redundancies as a result of the Offer.
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