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Toshiba Medical Systems is now officially Canon Medical Systems

by Thomas Dworetzky, Contributing Reporter | January 04, 2018
Business Affairs
At RSNA 2017, Toshiba and
Canon exhibited side-by-side
Canon has crowned its acquisition of Toshiba Medical Systems by officially changing the name of the group to Canon Medical Systems.

“Canon Medical Systems will continue to expand to accelerate the growth of the Canon Group’s medical equipment business and contribute to better health care throughout the world,” the company said in a statement.

Since the deal happened in March 2016, a variety of regulatory approvals were needed to rename the global concern.

The name change was initially announced in October, 2017, and took place on January 4, 2018, as originally scheduled.

Canon acquired the unit, which does business in over 140 countries, from Toshiba through an unusually structured deal that drew some criticism at the time.

In July, 2017, EU merger commissioners sent Canon a Statement of Objection over the two-step deal it used to acquire Toshiba Medical Systems.

While the approval of the merger will remain “effective,” the organization said that in its preliminary view, the deal used a “so-called 'warehousing' two-step transaction structure, involving an interim buyer, which essentially allowed it to acquire Toshiba Medical Systems prior to obtaining the relevant merger approvals,” according to the commission.

The deal had caused concerns in China and Japan as well.

In January, China's Ministry of Commerce reportedly slapped a 300,000 yuan ($43,000) antitrust fine on the deal.

The punitive measure was “for allegedly violating antitrust regulations with its acquisition of Toshiba Medical Systems Corporation,” according to China News.

The deal caused even more concern in Japan.

Toshiba dodged potential legal entanglements when it first sold Canon an entity known as "MS Holding", a "special-purpose vehicle with but $300 in capital" formed solely to do this deal. The ploy took voting control from Toshiba Medical and gave it to MS Holding. This vehicle had only three shareholders — the former head of trading house Sumitomo Corporation, a lawyer, and an accountant. Each owned one-third of the entity.

The medical business went to Canon for over $6 billion and the deal got a regulatory nod of approval in May, but that came with a serious warning.

“We decided to make an announcement about the warning to let everyone know that it is not acceptable, so the same method won’t be used in the future,” Takeshi Shinagawa, director of the Fair Trade Commission's (FTC) mergers-and-acquisitions division, stressed at a news conference at the time.

Complaints poured in from other jilted Toshiba suitors. One, losing bidder Fujifilm Holdings, took its outrage public, noting that it "would make a mockery of the law."

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