Japanese group Ricoh yesterday said it would buy Ikon Office Solutions of the US, which sells and services office equipment, for $1.62bn in cash to win access to Ikon's large corporate and government customers and build its North American distribution network.

Ricoh, a manufacturer of office printers, fax machines and copiers, has been a longstanding supplier of equipment to Ikon. Ricoh's business is concentrated in Japan, however, and Ikon is one of the last office equipment companies with a strong North American presence that had not already been acquired in recent years.

The deal will allow Ricoh, headed by Shiro Kondo, to retain customers even after they initially purchase office machines, by servicing the equipment over the course of its life.

Ikon, whose board of directors had been reviewing the company's options as it slashed costs to address sliding sales and profits, also distributes equipment made by Ricoh's larger Japanese competitor, Canon. Canon has been hit by consolidation within the US market for office equipment distribution

Julie MacIntosh, New York