Canon's fortunes fade as Ricoh makes key US purchase

Canon Inc, Japan's biggest office-equipment maker, fell the most in more than five months in Tokyo trading after Ricoh Co agreed to buy Ikon Office Solutions Inc, the largest copier distributor in the United States.

Canon fell 5.2 percent to close at 4,790 yen on the Tokyo Stock Exchange, the biggest decline since March 3. Ricoh added 2.9 percent to 1,777 yen, after gaining as much as 6.8 percent.

UBS AG said the acquisition may cause Canon's North America revenue to fall by as much as half, while Merrill Lynch & Co estimates the Tokyo-based company's overall sales would drop about 3 percent if it lost Ikon as a sales channel. The purchase adds 400 sales locations for Ricoh in the US, Canada and Western Europe, markets that together account for more than half of Canon's sales.