Canon will cut off ties with HP should Xerox’s acquisition happen, according to its CEO and Chairman Fujio Mitarai in an interview with Nikkei Asian Review.
Canon has a 35-year partnership with HP, of which Mitarai said that the foundation has been based on a “relationship of trust between top management” of both companies and “is not something that can be built overnight”.
HP is one of Canon’s biggest customers, contributing almost 14% of Canon’s sales for laser-printer components. According to Nikkei, the total loss should the relationship end is about 540 billion Yen. However, if Xerox acquires HP, this could lead to an even bigger competitor to Canon’s business. Losing Canon would mean that HP would have to find another source for components.
Mitarai told Nikkei 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."
Competition is expected to intensify in the shrinking market for copiers, multifunction printers and other office equipment.
Earlier in the week, Xerox officially launched a bid offer for HP at $24 a share. HP acknowledged the offer, and asks that shareholders await HP’s review before any action.
In an interview with CNBC, HP Inc.’s CEO, Enrique Lores had also forecasted that the company’s bottom line will dip in the quarter due to COVID-19. Most of HP’s products are produced in China. In the wake of the outbreak, HP had to shut down its factories in China, affecting the company’s manufacturing. Lores added that the majority of HP’s factories in China are now open, but production is not at maximum capacity.
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