The Impact of IKON Being Acquired by Ricoh

Tuesday, 11 November 2008 17:03

On 27th August 2008 it was announced that IKON Office Solutions had agreed to be acquired by Ricoh, which was then given clearance from the European Commission on 24th October 2008. This deal was then made final on 31st October 2008 when shareholders agreed to the acquisition. As a result of this merger, IKON is now a wholly owned subsidiary of Ricoh.

It has been said that Ricoh have had a long standing relationship with IKON. With the amount of area coverage that IKON already have, Ricoh will be able to expand their US distribution network by a substantial amount. The European Commission, upon deciding that there were enough competitors for all the products concerned, were able to give clearance for the acquisition of IKON by Ricoh. They found that no competitors of Ricoh are dependent on IKON's distribution. However, IKON is a substantial company, with around 24,000 employees in more than 400 locations throughout North America and Western Europe, so the acquisition of IKON by Ricoh is bound to have some effect o­n the industry.

Before the merger, IKON sold and leased a range of products from manufacturers such as Canon, Ricoh, Konica Minolta and HP. It seems that Canon could be the manufacturer that is hit the hardest, as, according to Reuters­ (http://uk.reuters.com/article/innovationNewsTechMediaTelco/idUKT3216620080827) 60 percent of the products handled by IKON were Canon machines, where as only around 30 percent were Ricoh before the acquisition. Ricoh have said that they will replace all Canon machines with their own printers, photocopiers and multifunctional devices within 3 to 4 years.

 This acquisition may leave some IKON customers in a difficult situation, because, although Ricoh have said they will continue to service other manufacturers of machine, they will eventually be replacing all their machines with Ricoh devices. This means that any customers using Canon machines will either have to change suppliers or manufacturers if they require a new device. For some customers this could be a difficult decision to make as they could be loyal to Canon and very happy with the machines they already use, but see changing their supplier as a daunting task, especially if they have a large number of devices. Fortunately there are some Canon suppliers that are prepared to make the transition as easy and as hassle free as possible. Some Canon suppliers are already seeing the effects of the merger, with an increase in the amount of enquiries coming from current IKON customers, perhaps indicating that some customers who already have Canon equipment are willing to stay loyal to Canon, even if this means changing their supplier.

The acquisition of IKON by Ricoh (http://www.marketwatch.com/news/story/Ricoh-Completes-Acquisition-IKON-Office/story.aspx?guid={E4612AE5-D69D-4EC5-B735-AFA902F9197B}) is bound to have some effect on the photocopier industry as IKON is such a large company, covering a substantial area of North America and Western Europe. What will be seen is the effect this merger will ultimately have on Canon. Already it has had some positive effect on some Canon dealers, especially those, such as Falcon Copiers, that already have a large customer base and are an established company with many years experience specialising in Canon equipment, making the transition from IKON to a new supplier seem an easy choice to make. Jon Tribe from Falcon Document Management says "Many IKON customers with a mix of Canon and Ricoh equipment will see a transition period where Ricoh service base takes president over canon. This is where a Canon specialist dealer can save the day." It is suppliers like these that will not only give existing IKON customers the chance to keep using Canon equipment, but also help lessen the impact on Canon.