Japanese copier Ricoh is set to acquire US office equipment distributor, Ikon Office Solutions for $1.6 billion. The move comes in the wake of weakening US dollar and offers Ricoh the opportunity to expand beyond Japan which accounts for half its revenues.

According to the deal, Ricoh will buy Ikon’s shares at $17.25 per share in cash which is premium of 11 percent on the Tuesday closing price of each Ikon share at $15.56. The news was well received in the stock market where Icon shares shot up by 9.4 percent or $1.46 to settle at $17.2 on Wednesday.

The boards of both companies Ricoh and Icon have approved the acquisition which now awaits the nod from regulatory authorities from US, Canada and Europe. The deal is expected to be complete by the end of the fourth quarter of 2008 financial year.

With the acquisition, Ricoh is set to take on prime competitor Canon whose printers and equipments accounted for 60% of Ikon’s products. The corresponding share of Ricoh’s equipments in Ikon was only 30% but in another three to four years Ricoh is expected to put in place its own printers and copiers. Ricoh will fund the acquisition from a combination of internal and external sources.