Konica and Minolta announce plans to merge operations, management

April 16, 2003

Medical business faces uncertain futureKonica Medical Imaging announced April 1 that its parent, Konica, has struck an agreement to merge with consumer imaging giant Minolta. The deal is expected to take effect by Aug. 1, 2003.It

Medical business faces uncertain future

Konica Medical Imaging announced April 1 that its parent, Konica, has struck an agreement to merge with consumer imaging giant Minolta. The deal is expected to take effect by Aug. 1, 2003.

It was not known why the Konica subsidiary, which manufactures and distributes imaging products for hospitals, imaging centers, clinics, and private practitioners, made the announcement. Corporate mergers usually are announced by the parent company. Wayne Thompson, Konica Medical Imaging president and chief operating officer of the Wayne, NJ, company, declined requests for an interview.

In a prepared statement, however, Thompson said a new managerial philosophy, focused on "the creation of new value," would be evident through all product lines, including its medical and radiological offerings.

"With such added resources, Konica Medical Imaging will be able to offer our customers rapid advancements in digital, imaging, and networking products," he said.

Thompson added that expanding Konica's resources and combining the imaging technologies of the two companies should increase competitiveness and profitability.

Eastman Kodak Health Imaging Group, a rival of Konica Medical Imaging, would not comment on the merger. John B. Strauss, director of marketing for imaging systems at Fujifilm Medical Systems, said Konica and Minolta appear to have their sights set beyond medical imaging.

"Clearly, the proposed merger seems to have implications for medical imaging," he said. "It's not worth speculating on what that impact would be for medical without the insight on what motivated the merger in the first place."

E. William Ward, a strategic marketing consultant for medical imaging, agreed that the implications are hazy.

"There's probably a pretty decent fit between Konica and Minolta in terms of copiers and equipment, but I don't know that Minolta's got much of an interest in medical imaging," Ward said. "The long-term fit for Konica and Minolta in the medical business is anybody's guess."

The merger announcement was made after the boards of both companies signed a letter of intent to integrate their management. The corporate group created by the merger would be "a new global market leader offering advanced technology in image formation products, and will adopt (Minolta's) corporate slogan, 'The essentials of imaging,'" according to a statement released by Konica Medical Imaging.

Under terms of the agreement, Konica will become the majority shareholder of Minolta in August through stock swaps with Minolta. A new integrated holding company would be formed. Two months later, the operations of both companies would be combined through business restructuring, and a new corporate group would emerge.