Konica, Minolta plan to merge; will cut
Corp. and Minolta Corp. plan to merge
operations, resulting in the elimination of some 4,000 jobs as part of an
effort to compete with rivals such as Canon Inc., Fuji Photo Film
Co. Ltd. and Ricoh Co., Dow Jones Business
The two Japanese camera and copier manufacturers announced their
plans today, saying they expect the
consolidation to cut costs by ¥50 billion ($ 419.6 million) a year.
Monetary terms of the merger deal weren't disclosed. The new entity
aims for sales of ¥1.3 trillion and operating profit of ¥150 billion in
the year ending March 2006.
The two will reduce their combined work force by 4,000, or about 10
percent, by 2005 from about 38,500 currently, the report said.
Under terms of the agreement, Konica will transform into a holding
company structure in April, and Minolta will join that structure via a
share swap in August. The swap ratio will be decided Jan. 16. The two
companies will reorganize their operations in October under the joint
Konica President Fumio Iwai will be president of
the joint holding company and Minolta President Yoshikatsu Ohta
will become vice president.
The two companies will use the Konica brand for sales of film and
the Minolta brand for cameras. Konica and Minolta already have ties in the
area of research and development of copiers.
Their combined sales currently lag well behind those of Canon and
Ricoh, the report said. Canon had sales of nearly
¥3 trillion yen for the business year ended December 2001. For the
business year ended March 2002, Konica posted group sales of ¥539.57
billion, while Minolta recorded sales of ¥510.86 billion.
The markets were wary about the merger and analysts, while
applauding the move to cut costs and consolidate, raised doubts over
whether the combination could boost their fortunes against bigger rivals
in printers, copiers and digital cameras, Reuters
"There are probably some synergies... but not as neatly as it
might sound," said Merrill Lynch analyst Richard
Said Hideo Ueki, chief investment officer at UBS Asset Management, "Industry consolidation will give more bargaining power to suppliers who survive it. In that context, this is positive."
This came on the heels of a Konica announcement that they would no longer devote research and development or manufacturing facilities to film cameras.
As an owner of a Konica Minilab, one of my major concerns will be the ongoing support of the minilab division.
Further investigation indicates that Minolta will continue to be the name under which cameras and binoculars will be sold. Konica will hold the upper hand in this merger, and Konica will continue to be the name used for film, sensitized goods and processing labs.
Currently Minolta offers a business equipment division, and I believe that most of the planned cuts will take place in that division.