Canon to Respond to EU and Potential $2.9 Billion Fine “in Due Course”
Canon Inc. of Tokyo, Japan, confirmed last week that it had has received Statement of Objections from the European Commission relating to Canon’s acquisition of Toshiba Medical Systems Corporation for $6 billion. The European Commission’s Statement of Objection states that its preliminary view of the acquisition was that Canon breached regulations by using a “warehousing” two-step transaction structure involving an interim buyer to purchase Toshiba Medical Systems before gaining European Union regulatory approval.
Canon stated last week that “upon careful examination of the Statement of Objections, (it) will respond in due course. Additionally, Canon cannot provide any further comment relating to this matter until the European Commission reaches its final decision.”
A Statement of Objections is a document that summarizes the preliminary view of the European Commission relating to a suspected breach of European competition law. It’s issued as part of an ongoing investigation and does not represent the final decision of the European Commission. The recipient of this document can reply to it and express their opinion, including the presentation of counter-arguments. The final decision of the European Commission can be appealed before the European Court of Justice in Luxembourg.
If the European Commission decides to fine Canon, the fine could be as large as 10 percent of Canon’s annual revenue, which would be about $2.9 billion.
According to Reuters, the “$6 billion deal, completed late last year, raised eyebrows at the time due to the unorthodox method which allowed Toshiba, which was struggling for cash after an accounting scandal, to book proceeds in time for the financial year-end in March. Rival bidder Fujifilm Holdings Corp had criticized it as a ‘mockery of the law.'”