Ricoh is close to buying IBM's digital printer business, according to sources close to the negotiations.

A deal is expected to be reached shortly, possibly with an announcement before the US stock market opens this morning.

Ricoh is one of Japan's largest office automation equipment makers and is known worldwide for its printers, fax machines and copiers. In the six months from April to September, sales of printers and office equipment, which make up the lion's share of Ricoh's business, jumped 7.3 percent on the same period a year earlier to ¥743.6 billion (£3.1 billion), thanks to the introduction of new products.

A report in the Nihon Keizai Shimbun business newspaper put the size of the acquisition at $700 million.