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By Edmund Klamann
TOKYO (Reuters) - Japan's Konica and Minolta, two film photography giants struggling for a foothold in the digital era, unveiled a merger plan on Tuesday that they hope will put them in the big league of camera and office machine makers with Canon and Ricoh.
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The merger, due in August and likely to create a Konica-controlled entity with a current market value of 460 billion yen ($3.86 billion), will bring a 10 percent cut over the next three years in their combined 38,500 work force.
The markets were wary about the merger and analysts, while applauding the move to cut costs and consolidate, raised doubts over whether the combination could boost their fortunes against bigger rivals in printers, copiers and digital cameras.
"There are probably some synergies... but not as neatly as it might sound," said Merrill Lynch analyst Richard Kaye.
Konica (4902.T), the world's third-largest photo film maker, and Minolta (7753.T), a leading maker of single-lens reflex cameras hobbled by heavy debts, are increasingly focusing on office machines, where they earn more than half their combined revenues.
The office equipment and digital camera businesses have been two of the brightest spots for Japan's struggling high-tech manufacturers, powering both Canon. Inc. (7751.T) and Ricoh Co. Ltd. (7752.T) to record profits.
But Konica and Minolta have been second-tier players in both of those markets, even if they boast strong positions in major office equipment niches such as color laser printers.
The stock market took a cautious stance on their merger prospects, bidding up their shares in the morning after media reports of the merger plans, but later pushing them down again.
Minolta's shares rose as much as nine percent but ended with a more modest gain of 1.52 percent at 536 yen.