Canon Inc. (NYSE: CAJ) agreed to buy Toshiba Corp.’s (TYO: 6502; OTC: TOSBF) medical equipment unit Toshiba Medical Systems Corporation (TMSC), for 665.5 billion yen ($5.9 billion).
“Canon aims to embrace the challenge of new growth through a grand strategic transformation,” the company says. “Canon will be able to leverage TMSC’s core strength in imaging diagnostics, further reinforcing TMSC’s operational strength in its in-vitro diagnostics business and next-generation medical IT, through M&A and other strategic investments, to make possible the strengthening of Canon’s biomedical business,” the company added in a statement.
TMSC is one of the leading global companies in the medical equipment industry. Within the field of medical X-ray computed tomography (CT) systems in particular, TMSC is the overwhelming market share leader in Japan and has been steadily increasing its global market share.
Additionally, TMSC is the only company in the industry with a broad product portfolio that spans diagnostic X-ray systems, magnetic resonance imaging (MRI) systems, diagnostic ultrasound systems and diagnostic nuclear medicine systems. The company also offers cutting-edge medical imaging solutions and in-vitro diagnostics aimed at individualized care.
The deal will be funded by Canon’s existing cash and borrowings.
Toshiba wants fresh funds to focus its resources on its pillar businesses – semiconductors and nuclear power, says Reuters. The electronics conglomerate has been eager to put last year’s $1.3 billion accounting scandal behind it and move on with streamlining its bloated businesses, whose poor performances have been masked by years of false bookkeeping. The U.S. Justice Department and Securities Exchange Commission were also said to be looking into the possibility of fraud, even though Toshiba had already been investigated in Japan.
Canon Inc. manufactures and sells imaging and optical products, including cameras, camcorders, photocopiers, steppers, computer printers and medical equipment. The company was founded in 1933 and is headquartered in Tokyo, Japan.
Toshiba’s diverse products and services include information technology and communications equipment and systems, electronic components and materials, power systems, industrial and social infrastructure systems, consumer electronics, household appliances, medical equipment, office equipment, lighting and logistics. Toshiba was founded in 1938 and is headquartered in Tokyo, Japan.