by
Thomas Dworetzky, Contributing Reporter | June 12, 2019
The deal's highly unusual structure was
widely criticized when it took place in 2016.
In July, 2017, EU merger commissioners
sent Canon a Statement of Objection — although the approval of the deal remained “effective.”
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In January, 2017, China's Ministry of Commerce reportedly
slapped a 300,000 yuan ($43,000) antitrust fine on the deal.
The deal caused
even more alarm 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 deal got a regulatory nod of approval in Japan in 2016, but Takeshi Shinagawa, director of the Fair Trade Commission's (FTC) mergers-and-acquisitions division, stressed at the time that, “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.”
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