After more than a week of rumors and speculation, Toshiba and Canon both made it official on Thursday: Canon has agreed to purchase Toshiba Medical Systems for more than $6 billion.
The sale comes on the heels of Toshiba’s admission to overstating its profits by nearly $2 billion over the last seven years, which led to changes in management and more than 100,000 job cuts.
Richard Berger, Canon’s global PR manager, talked about the deal via email with RadiologyBusiness.com, praising the company’s reputation and looking ahead to the future.
RadiologyBusiness.com: What about Toshiba Medical Systems was attractive to Canon? Why pursue this deal?
Richard Berger: Toshiba Medical Systems’ largest business is diagnostic imaging systems, and it is the only company in the industry with a broad product portfolio that includes diagnostic X-ray systems, medical X-ray CT systems, magnetic resonance imaging systems and diagnostic ultrasound systems. Other businesses include medical IT solutions, in-vitro diagnostic systems centered on biochemistry, and medical-use X-ray tubes.
Toshiba Medical Systems has a 100-year history of technology development and has led technological advances in such diagnostic imaging technologies as computed tomography and magnetic resonance imaging. In addition to fundamental technologies for diagnostic imaging systems, the company possesses such advanced technologies as radiation exposure reduction technology and image-processing technology, giving it advantages that no other company could easily match.
What impact will this transaction have on Canon?
Under Phase V of the Excellent Global Corporation Plan, which we launched this year, we are working to strengthen B2B business. As part of this effort, we are focusing our energies in the areas of safety, security and health care, segments in which we are seeing growing needs on a global scale. Health care is a business segment in which, along with network cameras, we are targeting growth.
Canon’s current medical equipment product portfolio comprises mainly digital radiography systems and eye care devices. By comparison, Toshiba Medical Systems has a diverse product and system lineup that includes CT and MRI systems. We believe that welcoming Toshiba Medical Systems into the Canon Group will enable us to gain new businesses in the medical sector.
We believe that, through this transaction, we will gain a platform that will enable us to compete at the same level as GE, Siemens and Philips, the three global leaders, in terms of product portfolio and sales channels.
Canon's statement about the deal says "further progress is expected in the field of medical equipment." Are there any specific technologies Canon hopes to focus more on in the future?
It is a little early to discuss such specifics, but some of the synergies we anticipate include faster entry into new fields, improved quality through the sharing of production technologies, increased net sales volume through expanded business domains supported by enhanced development capabilities, and improved manufacturing efficiency and profitability.
With this deal finalized, what is the next step for Canon's healthcare business?
It should be noted that the deal has yet to be finalized. As mentioned in the press release, this transaction is conditional upon the clearance of necessary competition regulatory authorities. Canon will not take possession of Toshiba Medical Systems shares until all regulatory approvals have been received, which, depending on the country, could take up to around six months or longer.
While concrete plans for after completion of the transaction are still under consideration, following the acquisition of its common stock, we intend to respect Toshiba Medical Systems’ corporate culture and management methods, and leave the management as is with the primary executive team members in place.
We value Toshiba Medical Systems’ executive team for their deep knowledge of the industry and their business promotion capabilities and, even after acquiring the company’s common stock, we would like for them to continue to be involved in the exercising of leadership.
This text was edited for space and clarity.