By Megumi Fujikawa 

TOKYO--Canon Inc. said Tuesday it plans to fully acquire Axis AB, a Swedish network video solutions provider, in a tender offer worth Yen333.7 billion ($2.8 billion).

The decision comes as the Japanese camera maker is struggling with falling demand for digital cameras and aims to diversify its operations overseas. The company said it sees network monitoring systems as a promising new business area.

Canon said it would commence the tender offer for Axis' shares in early March, as soon as its bid is approved by the Swedish Financial Supervisory Authority and Nasdaq Stockholm where Axis is listed.

The Swedish company said that its board of directors has accepted Canon's bid, which represents a 49.8% premium to the company's closing share price on Monday.

In 2014, Axis brought in SEK5.45 billion in revenue. The company specializes in network cameras for the physical security and video surveillance industry.

Canon said it is examining the effects of the acquisition on its earnings. In late January, it reported a 6% increase in its net profit for the October to December period as a weaker yen enhanced the value of its overseas earnings, outweighing the effect of weaker demand for digital cameras.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

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