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Canon buys NEC Machinery Corporation
Ilse Jurriën : September 10th 2005 - 12:16 CET
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 Canon buys NEC Machinery Corp. : Canon, Japan's top copier and digital camera maker, announced that it will pay about 5.1 billion yen ($46 million) to buy 54 percent of NEC Machinery Corp. a unit of NEC Corp. Canon said NEC Machinery, a maker of chip-manufacturing equipment, possessed advanced manufacturing technologies for automation equipment and the acquisition would help Canon speed up its on-going cost-cutting effort. Canon will pay 1,212 yen a share for NEC Machinery, a 21 percent premium to its 1,000 yen closing price. "It's a positive move. I think it was a cheap, good purchase," said Mizuho Securities analyst Ryosuke Katsura. "This goes along with Canon's plan to further cut costs in production, and it found a good deal."
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 Canon shares - NEC Machinery Corp.
NEC, Japan's third-largest electronics conglomerate, owns 39.6 percent of NEC Machinery, while its affiliated unit NEC Kansai Ltd. owns 14.3 percent. The two had agreed to sell the shares, Canon said. Since Canon did not set an upper limit on the tender offer, NEC Machinery's shares could be delisted although Canon said that was not its intention. If the shares were delisted, Canon said it would consider making NEC Machinery a wholly owned subsidiary. Canon will also acquire from NEC a 100 percent stake in Anelva, an unlisted unit of the electronics giant that makes equipment for the fabrication of semiconductors and LCDs.
Terms of the Anelva sale were not immediately available
Investors have been waiting to see how Canon would use a growing cash pile that is expected to top 1 trillion yen this year. Canon has said that it was looking to acquire companies to propel its earnings growth. Prior to the announcement, shares in Canon closed down 0.53 percent at 5,640 yen while NEC's stock ended down 0.34 percent at 588 yen. That compared with a 0.37 percent decline in the Tokyo stock market's electric machinery index.
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