Canon Buys Scandal-Hit Toshiba’s Medical Imaging Unit For $5.9B

Japanese camera maker Canon Inc. bought Toshiba’s medical imaging business — Toshiba Medical Systems Corporation (TMSC) — for 665.5 billion yen ($5.9 billion) Thursday. Canon had secured exclusive negotiating rights to acquire the Toshiba unit earlier in March.

Separately Toshiba announced that it had reached a deal with China-based home appliance manufacturer Midea Group about selling its refrigerator and other so-called “white goods” business. The deal is set to be finalized by the end of March and a price tag is yet to be fixed, Toshiba’s spokeswoman Midori Hara reportedly said.

Toshiba, whose varied businesses range from laptops to nuclear power plants, is selling the medical imaging unit to fund a company-wide overhaul following last year’s revelation about a massive accounting scandal at the company that went back to around 2009.

Thursday’s deal would yield a profit of about 590 billion yen ($5.3 billion), according to Toshiba. The funds will help Toshiba drop its plans of seeking about $1.8 billion in additional loans from Sumitomo Mitsui Banking Corp, Mizuho Bank and Sumitomo Mitsui Trust Bank, Reuters reported, citing sources.

TMSC is the world's second-largest manufacturer of CT scan machines. The company, which also makes X-ray and magnetic resonance imaging (MRI) systems, had a revenue of 405.6 billion yen ($3.64 billion) in 2015.

"It [TSMC] might be a little pricey, but will generate profits in the first year," IwaiCosmo Securities senior analyst Kazuyoshi Saito told Reuters.

On Thursday, shares of Toshiba fell by as much as 10 percent on the Tokyo Stock Exchange after a report said the United States Department of Justice and the Securities and Exchange Commission were investigating allegations of fraud against the Japanese conglomerate.

Canon’s shares were down 1.4 percent on the Tokyo Stock Exchange at the end of trading Thursday.