Canon gets pole in race for Toshiba
by Takashi Amano,
2016-03-10 05:56:30.0
TOSHIBA has granted exclusive negotiation rights to Canon to acquire its medical equipment unit as the Japanese industrial giant restructures operations after an accounting scandal.
Canon’s proposal was superior to others and the exclusive rights would last until March 18 as the companies worked towards a final agreement, Toshiba said on Wednesday.
Suitors for Japan’s largest medical equipment maker had been told they needed to offer more than ¥700bn ($6.2bn), people familiar with the matter have said.
Toshiba, which makes everything from nuclear power equipment to laptop computers, memory chips and home appliances, is seeking to revive profits by narrowing the scope of its business lines. An accounting scandal has left the conglomerate in tatters, facing record losses, job cuts and potential spinoffs.
"Toshiba sells it with strong reluctance, but it has no choice," said Hiroyasu Nishikawa, an analyst at Iwai Cosmo Securities. "Toshiba will lose a driver for sales and profit."
Canon, the world’s biggest camera maker, is targeting a business that makes diagnostic imaging systems such as magnetic resonance imaging (MRI), X-ray and ultrasound equipment. It would take the company into competition with General Electric, Philips and Siemens for MRI machines that cost more than $100,000 each.
Canon is diversifying as smartphones eat into its camera business.
The Japanese company also makes printers, fax machines and projectors, while its healthcare business includes radiography and ophthalmic equipment.
Canon had ¥634bn of cash and equivalents at year-end with total debt of ¥1.6bn, data compiled by Bloomberg show.
Toshiba’s healthcare division, which includes the medical equipment unit and other businesses that the company does not plan to sell, had sales of ¥409.5bn in the 12 months ended-March last year and operating income of ¥23.9bn, the data show.
"Medical equipment is a growing segment and is one of the few attractive businesses Toshiba has left today," Mark Newman, MD of Sanford C Bernstein in Hong Kong, said before the announcement. "But, following their accounting scandal, they desperately need to raise money to strengthen their balance sheet."
Bloomberg
According to sources, Toshiba corp is close to landing a $2,5bn deal to buy out the Swiss-based meter maker
Photograph by: Picture: iSTOCK
TOSHIBA has granted exclusive negotiation rights to Canon to acquire its medical equipment unit as the Japanese industrial giant restructures operations after an accounting scandal.
Canon’s proposal was superior to others and the exclusive rights would last until March 18 as the companies worked towards a final agreement, Toshiba said on Wednesday.
Suitors for Japan’s largest medical equipment maker had been told they needed to offer more than ¥700bn ($6.2bn), people familiar with the matter have said.
Toshiba, which makes everything from nuclear power equipment to laptop computers, memory chips and home appliances, is seeking to revive profits by narrowing the scope of its business lines. An accounting scandal has left the conglomerate in tatters, facing record losses, job cuts and potential spinoffs.
"Toshiba sells it with strong reluctance, but it has no choice," said Hiroyasu Nishikawa, an analyst at Iwai Cosmo Securities. "Toshiba will lose a driver for sales and profit."
Canon, the world’s biggest camera maker, is targeting a business that makes diagnostic imaging systems such as magnetic resonance imaging (MRI), X-ray and ultrasound equipment. It would take the company into competition with General Electric, Philips and Siemens for MRI machines that cost more than $100,000 each.
Canon is diversifying as smartphones eat into its camera business.
The Japanese company also makes printers, fax machines and projectors, while its healthcare business includes radiography and ophthalmic equipment.
Canon had ¥634bn of cash and equivalents at year-end with total debt of ¥1.6bn, data compiled by Bloomberg show.
Toshiba’s healthcare division, which includes the medical equipment unit and other businesses that the company does not plan to sell, had sales of ¥409.5bn in the 12 months ended-March last year and operating income of ¥23.9bn, the data show.
"Medical equipment is a growing segment and is one of the few attractive businesses Toshiba has left today," Mark Newman, MD of Sanford C Bernstein in Hong Kong, said before the announcement. "But, following their accounting scandal, they desperately need to raise money to strengthen their balance sheet."
Bloomberg
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