Canon Inc. (CAJ, Financial) is a Japanese multinational corporation headquartered in ŠŒta, Tokyo, Japan. The company was originally named SeikikŠgaku kenkyŠ«sho (Precision Optical Industry Co. Ltd.). The company’s name was changed to Canon Camera Co., Inc. in 1947, and shortened to Canon Inc. in 1969.
Canon Inc. specializes in the manufacture of camcorders, cameras, computer printers, steppers, photocopiers, and medical equipment. In 1937, the Precision Optical Instruments Laboratory was started by Takeshi Mitarai, Goro Yoshida, Saburo Uchida and Takeo Maeda in Tokyo. In 1934 the company built the Kwanon, Japan’s first-ever 35 mm camera with a focal plane based shutter, in prototype form. In 1976 Canon introduced the world’s first micro-computer embedded camera, called the AE-1. In 1997 Canon launched itself into the digital video camcorder market, and in 2005 introduced its first high-definition camcorder.
Acquisition of Axis at $2.8 billion
Canon Inc. has launched a bid to buy Axis Communications AB, Swedish manufacturer of network security cameras, for about $2.8 billion, in an effort to make a foray into the surveillance products market. Canon has offered to buy all of Axis shares at 340 crowns apiece, making it the company’s biggest purchase ever.
Canon’s core business of cameras and office equipments has been seeing a very slow growth in recent times. There has been a rise in its operating profit at 7.8% and its net profit increased 11% in 22014, but that was mostly as a result of a decline in the value of yen, which stumbled 8% against the U.S. dollar and Euro in 2014.
There was a 21% drop in the sales volume at Canon’s office-equipment unit and a drop of at the camera arm in 2014. According to research firm Euromonitor, the global digital camera market is predicted to contract by 20% in 2018 from a 2010 peak.
Axis is the worldwide leader in network security cameras. There is a $3.86 billion segment for network-connected security cameras within that market. As of 2013, Axis is the front-runner with a 17.5% share.
According to Axis, its board of directors collectively supported the offer, with three of its top shareholders, holding around 40% of total shares, accepting it.
The Swedish company is poised to remain in Lund, Sweden, and work as an independent legal entity within Canon. There will be no change in its brand names, present management team, and workforce of 1,900 employees.
Canon is already in the surveillance camera market and the deal comes after a slight increase in Canon’s fourth-quarter profit, reported in January 2015.
Acquisition and beyond
The deal is supposed to make Canon a leading player in the video surveillance market, which was worth an estimated $15 billion at the end of 2014.
The acquisition has marked an important step for Canon and its investors as there has been a steady decline in digital camera sales due to the advent of smart phones. The deal will help the company to not just sell cameras, but also to have bigger networking service that it can devise and run.
According to industry analysts, rapid growth in the surveillance camera industry is expected, with Axis leading the global market, which is expected to give a boost to Canon’s upcoming revenues. It remains to be seen how well Canon can manage the Swedish company, and whether it will further raise its market share in order to grab the global top position.
