June 17, 2014 8:02 a.m. ET
TOKYO—In a bid to counter a slump in its camera sales,
Nikon Corp.’s
7731.TO -2.59%
Nikon Corp.
Japan: Tokyo
¥1616
-43
-2.59%
June 18, 2014 3:00 pm
Volume :
7.46M
P/E Ratio
13.69
Market Cap
¥660.65 Billion
Dividend Yield
2.72%
Rev. per Employee
¥40,776,600
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incoming chief executive said on Tuesday he would aggressively expand his company’s medical-device business through acquisitions.
Kazuo Ushida,
currently the senior executive vice president, said the Tokyo-based camera maker plans to spend about $2 billion for mergers and acquisitions in the medical and instruments businesses over the next three years. “Merger and acquisition will account for a large part of the initial sharp growth” in the medical business, Mr. Ushida said. “There is a huge potential” in this business, he added.
Mr. Ushida, who will take over as CEO pending approval at an annual shareholders meeting later this month, said Nikon will hire M&A experts to compile a list of targets and to handle due diligence and postmerger integration. It also will allocate nearly a quarter of its $2.2 billion in planned research-and-development spending for the medical business and new areas. The transition comes as Nikon grapples with falling sales of its compact digital cameras and digital single-lens reflex, or DSLR, cameras as consumers opt to snap photos on their smartphones. With a bigger emphasis on emerging markets and cost cuts, the company expects 2.1% growth in its imaging-products business over the next three years. Starting from scratch, the camera and precision-equipment maker will aim to generate ¥130 billion ($1.28 billion) in revenue from medical and other new businesses by the fiscal year ending in March 2017. That would account for 11% of its total revenue target. Overall, the company expects 22% growth in revenue and a 75% rise in operating profit from the year ended in March 2014 to the year ending in March 2017. Nikon’s health-focused blueprint for growth mirrors a series of other technology companies, including
Toshiba Corp.
6502.TO +0.22%
Toshiba Corp.
Japan: Tokyo
¥449
+1
+0.22%
June 18, 2014 3:00 pm
Volume :
22.24M
P/E Ratio
37.42
Market Cap
¥1906.92 Billion
Dividend Yield
1.78%
Rev. per Employee
¥31,552,400
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and
Hitachi Ltd.
6501.TO -0.42%
Hitachi Ltd.
Japan: Tokyo
¥709
-3
-0.42%
June 18, 2014 3:00 pm
Volume :
18.75M
P/E Ratio
12.93
Market Cap
¥3470.43 Billion
Dividend Yield
1.55%
Rev. per Employee
¥29,475,900
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, that are betting big on rising medical needs as revenue from traditional electronics products tapers off. Rival Canon Inc. also has beefed up its R&D spending on medical devices. Toshiba and Hitachi have said they are actively hunting for acquisition targets as they look to double their health-care revenue over the next few years. An increasing number of companies, such as Sony Corp.,
Samsung Electronics Co.
005930.SE -1.16%
Samsung Electronics Co. Ltd.
S. Korea: KRX
KRW1358000
-16000
-1.16%
June 18, 2014 3:00 pm
Volume :
220,887
P/E Ratio
6.75
Market Cap
KRW225976.23 Billion
Dividend Yield
1.02%
Rev. per Employee
N/A
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and Apple Inc., have also launched or plan wearable devices and software to collect and track health data. While the field is flooded with new competitors, Nikon says it will use its prowess in semiconductor lithography technology to develop, for example, DNA chips—a hot technology for genetic research. Write to Kana Inagaki at kana.inagaki@wsj.com