Canon will end a 35-year relationship with HP if Xerox succeeds in its hostile bid to take over its larger rival, according to Canon CEO and chairman Fujio Mitarai. HP is among Canon’s biggest customers, generating almost 14% of its sales.
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| HP 3D plant |
Xerox this week officially launched a $35 billion offer directly to HP shareholders - the latest move in its nine-month-long fight for control of HP. “Our proposal offers progress over entrenchment,” said Xerox CEO John Visentin. HP’s board has rejected the offer as “irresponsible", saying it undervalues the company
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| "A relationship of trust": Canon CEO and chairman Fujio Mitarai |
HP is among Japanese manufacturer Canon’s biggest customers, generating almost 14% of its sales.
In an exclsuive written interview with the Nikkei Asian Review, Canon chief Fujio Matari said: "The foundation of this partnership is, above all else, built upon a relationship of trust between the top management of both companies, including HP CEO Enrique Lores and Tuan Tran, head of its printing division.
"At the same time, it also involves a great deal of technological exchange gradually established over the decades-long relationship."
Mitarai said that such a relationship "is not something that can be built overnight," and that Canon intends "to partner with and strive to advance collective interests of organizations that have a strong track record of operating with integrity and clearly share our values."
A takeover by Xerox would create a formidable rival to Canon's own office equipment business, said Nikkei staff writer Satoshi Morotomi. “Sales to HP contributed about 540 billion yen ($US5.01 billion at current rates) of Canon's 3.95 trillion yen in 2018 revenue, so the loss from cutting ties would not be small. But Xerox's hostile takeover threatens to create a competitor with roughly double the Japanese company's annual sales.
“Mitarai's comments appear meant to dissuade Xerox's move. Losing Canon as a supplier would force HP to seek another source for key parts.”
Canon has not disclosed the terms or length of its current supply agreement with HP.
