The OEM purchased Toshiba Medical Systems Corporation (TMSC) earlier this year.
In March, Canon reported its agreement to make TMSC a subsidiary, having “concluded a share transfer agreement”, though the acquisition was dependent on “the clearance of necessary competition regulatory authorities”. Earlier that month, it was reported Canon had been granted “exclusive negotiating rights” for TMSC, after an earlier reveal that Toshiba was to sell the unit, with interested parties including Fujifilm and Konica Minolta.
The sale of the unit was aimed at “shoring up Toshiba’s capital” after it was found to have “inflated profits […] with bosses’ knowledge” by around £780 million ($1.2 billion/€1.1 billion) in July 2015. This led to former CEO Hisao Tanaka’s resignation after admitting he was aware of the scandal, facing an action for compensation of ¥300 million ($2.4 million/€2.2 million), along with two former CFOs and two other ex-CEOs. The profit scandal cost the OEM around ¥90 billion ($738 million/€680 million) in the first half of the financial year, and lies behind the restructuring plans.
However, as The Recycler reported in April, Toshiba was paid before the deal was closed, with Reuters calling the move a “manoeuvre skirting antitrust rules”. In July, we also reported that the FTC had approved the acquisition, but “issued a warning over the way [Canon and Toshiba] carried out the deal”.
Now, Canon has confirmed that a “resolution was passed” at its board of directors meeting “to acquire the shares” and “make the company a subsidiary, as the necessary clearance from competition regulatory authorities has been obtained”. The OEM also gave reasons for the acquisition, including that it “aims to embrace the challenge of new growth through a grand strategic transformation”.
This also includes “reinforcing and expanding new businesses in particular”, with the OEM aiming to “cultivate its health care business within the safety and security sector as a next-generation pillar of growth”. TMSC was “one of the leading global companies in the medical equipment industry”, and the “overwhelming market share leader in Japan” with a “steadily increasing” global share, the confirmed deal “welcom[ing TMSC] into the Canon Group”.
Canon believes that by “maximising the combination of both companies’ management resources, Canon aims to solidify its business foundation for health care that contribute to the world”. Purported benefits include “accelerated entry into new fields” and “further improvements in quality through shared production technology”, as well as the ability to “expand business domains through the enhancement of R&D capabilities”.