Canon to buy video surveillance leader Axis for $2.8 billion
By Ritsuko Ando and Olof Swahnberg
TOKYO/STOCKHOLM (Reuters) - Canon Inc (7751.T: Quote) made a 23.6 billion-Swedish-crown ($2.83 billion) offer for network video surveillance leader Axis AB AXIS.ST on Tuesday -- the biggest purchase ever for the Japanese firm trying to expand beyond a shrinking camera market.
Canon said it had launched a bid to buy all the Swedish company's shares at 340 crowns apiece, a premium of nearly 50 percent to their closing price of 226.90 on Monday. At 1126 GMT (06:26 a.m. EST), shares of Axis were up 48 percent at 336.50 crowns.
Axis said its board of directors unanimously supported the offer, and that three of its top shareholders representing around 40 percent of total shares will accept it.
Canon already sells surveillance cameras and sees the sector as a growing market, although it has not disclosed how much it earns from such products.
The deal will make Canon a top player in the video surveillance market, which was worth an estimated $15 billion at the end of last year, according to researcher IHS.
Within that market, there is a $3.86 billion segment for network-connected security cameras which is led by Axis with a 17.5 percent share as of 2013.
Greger Johansson, analyst at research firm Redeye who had a bull case scenario of 250 crowns per share, said he thought the main owners had been unwilling to sell below 300 crowns as Axis had high revenue growth and was the No. 1 player in its market.
"We think some of the bigger players like Panasonic, Sony and Pelco could be interested... although the likelihood is relatively low considering the high bid." Continued...