Canon enters surveillance market with Axis acquisition

Canon has announced plans to purchase Axis Communications AB for $2.8bn, making it the Japanese camera-maker’s biggest acquisition to date

Canon plans to become part of the rapid growth of the video surveillance market, and has taken a strong step towards that goal by purchasing Axis

The world’s largest camera-maker is planning to expand into the surveillance products market and announced it was launching a tender offer to buy all of Sweden’s Axis shares for 340 kronor in cash. According to a statement issued by Axis, this price was almost 50 percent more than the stock’s closing price on Monday, the last trading day prior to the offer announcement. The Swedish company said its board of directors unanimously supported the offer and the offer price is conditional to a dividend that Axis plans to pay its shareholders.

Canon has been struggling with falling demand for digital cameras after reporting a slight increase in its fourth quarter profit. This weakness was potentially offset by a weaker yen and increasing sales of office equipment. A statement issued by Canon said the company plans to offer ‘innovative, sophisticated network video solutions’ by combining Canon’s ‘excellent optical and imaging technologies’ and Axis’s ‘outstanding network image processing technology.

The acquisition plan falls in line with Canon’s plans to become part of the rapid growth of the video surveillance system market. The company already sells surveillance cameras and, although it has not disclosed how much profit it earns from their products, sees it as a promising new business area. The purchase also offers an opportunity for Canon to diversify its overseas operations as around half of Axis sales come from the Americas, with 40 percent coming from Africa, Asia, the Middle East and Europe.