Toshiba sells medical business to Canon for £4.2bn

Toshiba Medical Systems has been at the centre of a bidding war for quite some time but news has now surfaced that Canon cast the winning bid at 665.5 billion yen (£4.2bn)

Rising restructuring costs of Toshiba Corp, which is dealing with the aftermath of an accounting scandal, prompted management to sell Toshiba Medical Systems in its entirety and had leading companies such as KKR, Canon, Fujifilm Holdings and Konica Minolta all placing bids.

However it seems that in a deal, which will be funded by existing cash and borrowings, Tokyo-based Canon has managed to out-bid its competition.

Canon had 654 billion yen of cash and equivalents as of Dec. 31 with total debt of 1.6 billion yen, according to data compiled by Bloomberg Business.

On Thursday, Fujifilm disclosed that it had asked Toshiba a day earlier to explain how it decided to enter exclusive negotiations with Canon. The statement called on Toshiba to respond by 3 p.m. in Tokyo on Thursday. Instead, Toshiba announced that it reached an agreement with Canon, reported the news site.

Canon is buying a business that makes diagnostic imaging systems such as MRI, X-ray and ultrasound equipment.

According to Bloomberg Business it would also take the company into competition with General Electric Co., Royal Philips NV and Siemens AG for MRI machines that typically cost more than $100,000 each.