The cash offer, which has the backing of Domino's board, represents a premium of 26.9% on yesterday's closing price of 721p and 42.6% on the volume weighted average share price for the past six months.

However, this morning's announcement of the 915p per share offer sparked a 32% jump in Domino's share price, to 950p, amid speculation that Brother's offer could spark a bidding war with other interested parties.

Brother highlighted the "stable and strong cash flow stream based on long-term customer relationships" of Domino's coding & marking business, although it appears most interested in Domino's relatively new digital printing business.

"Brother expects the digital printing sector to exhibit rapid growth globally, driven by increasing demand for small-lot and tailored packaging orders, and therefore foresees a substantial opportunity in the sector," the company said.

Toshikazu Koike, representative director and president of Brother, said: "The combination of Brother and Domino will represent a unique value proposition in industrial printing with significant growth potential.

"The combined global platform will help us accelerate both companies' growth strategy. We have been strongly impressed by the achievement of the incumbent management team and employees of Domino and we are looking forward to working with them."

For its part, Domino cited competition from "a new breed of competitor with significantly greater scale and financial firepower than Domino" as one of the key drivers behind its decision to recommend Brother's offer to its shareholders.

Domino chairman Peter Byrom said that while Domino had established itself "at the forefront of the coding and marking industry" the markets in which it competes are evolving as a result of the increasing adoption of digital technology, attracting larger and wealthier competitors.

Byrom added: "It has become increasingly clear that maintaining its position in the enlarged markets will require Domino to find the appropriate partner that brings complementary skills and strengths in digital printing."

In explaining its reasons for recommending Brother's offer to its shareholders, Domino cited a number of factors, including the growing deployment of digital inkjet technology in packaging printing, which was seen as a threat to Domino's coding & marking business.

This led the company to invest in the development of its own digital printing business in 2011, initially focused on printing full colour labels "but with the ultimate objective of achieving a leading position for Domino in respect of the deployment of digital printing technology...in all aspects of packaging".

By 2014 Domino had built "a significant position in providing full colour digital label presses to the label converter market". However, it added that its digital printing business was still in the investment phase and had diluted group returns for the past two years.

Recently, factors such as the slowdown in China and the return of more normal GDP +2-3% growth rate in the coding & marking sector (after a surge of catch-up investment around the end of 2013 and beginning of 2014) have meant a less buoyant market for Domino's products.

At the same time Domino has had to step up investment in research and development and operational capacity leading to the expectation that "cash investments from this year and over at least the next three years" will be at "higher levels than had been normal for the Domino Group".

"The requirement for greater investment in new products and technologies will be an ongoing feature of the markets in which the Domino Group operates", the company stated. "The competition, both established and new entrants, is defined by players of significantly greater scale and financial firepower than Domino, and the board of Domino believes it will be increasingly difficult as a standalone business to optimise and maintain the leading position it has created."

Brother said it intended to invest in the digital printing market "to grow the business, leveraging Domino's achievements to date". It added that it could "provide incremental value in the mid- to long-term by sharing its production know-how and global procurement capability through its larger organisation".

Brother anticipates Domino acting as a standalone division run by its existing management team, with no changes to its major locations or redeployment of fixed assets.

Domino is headquartered in Cambridge and employs around 2,300 staff worldwide; it has a turnover of £350.2m. Brother is headquartered in Nagoya, Japan and reported sales of £3.4bn for the year ended 31 March 2014.

The deal must be approved by shareholders representing at least 75% in value of Domino's issued shares at a court meeting (the date of which has yet to be confirmed). Domino's shareholders at close of business on 6 March 2015 will still receive the proposed final year dividend for the year ended 31 October 2015 of 14.76p per share, to be paid on 10 April.

Assuming it receives the required level of shareholder approval, Brother will finance the acquisition through "debt or existing cash resources". Citibank has provided a £1.1bn bridging facility to Brother to finance the acquisition.