EU slaps $32 million fine on Canon for jumping gun on Toshiba deal
The EU has come down hard on companies that don’t strictly follow its merger rules, fining Facebook Inc. for providing misleading information during the 2014 review of its WhatsApp takeover.
Canon Inc. was fined 28 million euros ($32 million) by the European Commission for moving forward with a takeover of Toshiba Corp.'s medical systems unit before seeking merger approval.
The Japanese imaging company deployed a tactic known as "warehousing" that was aimed at circumventing requirements to file for approval, the EU's antitrust arm said in a statement.
The EU has come down hard on companies that don't strictly follow its merger rules, fining Facebook Inc. for providing misleading information during the 2014 review of its WhatsApp takeover. It also fined Altice NV last year for similar 'gun-jumping' when it implemented its takeover of PT Portugal before it got permission. Altice is challenging the EU decision at court.
In Thursday's case, the commission said that, as a first step, an interim buyer purchased 95% of the capital of the unit for 800 euros, while Canon paid 5.28 billion euros for the remaining 5% stake. Canon only sought regulatory approval after it exercised share options to buy 100% of the unit. The EU said the first step contributed to the takeover and Canon's failure to file with authorities violated its merger control rules.
Canon said in a statement it "disagrees with the European Commission's legal assessment, which violates fundamental principles of law" and would appeal the fine.
Japan's Fair Trade Commission warned Canon in 2016 for implementing the Toshiba deal before seeking regulatory approval but didn't fine the company.