Canon Fined $31.8 million for Violating EU Merger Rules in Toshiba Corp’s Medical Unit Acquisition

From Reuters:

BRUSSELS - Japanese camera and printer maker Canon was hit with a 28-million-euro ($31.8 million) fine on Thursday for jumping the gun in its acquisition of Toshiba Corp’s medical unit three years ago before securing EU antitrust clearance.

The European Commission said Canon had breached EU merger rules by using a so-called “warehousing” two-step transaction structure involving an interim buyer to purchase the company prior to obtaining the relevant approvals.

The unorthodox method allowed Toshiba, which was struggling for cash after an accounting scandal, to book proceeds in time for the financial year-end in March.

“Our merger assessment and decision-making depends on the Commission being sure that companies are not jumping the gun and implementing mergers without our approval,” European Competition Commissioner Margrethe Vestager said in a statement.

The deal was cleared unconditionally in September 2016. The EU competition enforcer charged Canon with breaching EU merger rules in July 2017.

French telecoms provider Altice was penalized to the tune of 124,5 million euros for a similar offense last year. Facebook and General Electric have also been sanctioned in recent years for breaching merger rules.

Reporting by Foo Yun Chee; Editing by Alissa de Carbonnel