Canon and Océ To Create Global Leader in Printing Industry

Canon and Océ 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 € 8.60 per share of Océ (the “offer”) represents a premium of 70 percent over the closing share price of Friday, Nov. 13, 2009 and 137 percent to the average closing price of Océ’s shares over the last 12 months. The offer values 100 percent 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 capitalize on a complementary fit in product mix, channel mix, R&D and business lines resulting in an outstanding client offer spanning the entire printing industry.

“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 realize 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,” said Tsuneji Uchida, president and COO, Canon.

“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,” said Rokus van Iperen, CEO, Océ. “This is the best possible combination in the consolidating global printing industry and will deliver scale in R&D, manufacturing and distribution. The combined organization 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.”

Canon and Océ have similar backgrounds in corporate values with a client-oriented culture and a technology driven business model. Océ 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 sales and marketing network throughout Asia.

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.

The Océ division will report (managerial and financially) to the Canon Board and will lead the R&D and manufacturing for its businesses. Further, Océ’s headquarters, combining R&D, production and sales functions, is expected to play an integral role for Canon’s European regional operations. The current Management Board and key management of Océ will remain in place. In the Océ division, the Océ brand name will be maintained and will be applied in all relevant markets.

The integration of both Canon and Océ businesses will take place over the coming three years. Canon and Océ have agreed on a high level integration plan and integration project organization. The integration will be aimed to optimize efficient coordination of sales, service, marketing, R&D and manufacturing and 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.

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.