Toshiba Corp granted exclusive negotiation rights to Canon Inc to buy its medical equipment unit as the Japanese industrial giant restructures its operations after an accounting scandal.
The proposal from Canon is superior to others and the exclusive rights will last until Friday next week as the companies work toward reaching a final agreement, Tokyo-based Toshiba said in a statement yesterday.
Suitors for the business, Japan’s largest medical equipment company, were told they needed to offer more than ￥700 billion (US$6.2 billion), people familiar with the matter have said.
Toshiba, which makes everything from nuclear power equipment to laptop computers, flash memory chips and home appliances, is seeking to revive profits by narrowing the scope of its business lines after an accounting scandal left it in tatters, facing record losses, job cuts and potential spinoffs.
“Medical equipment is a growing segment and is one of the few attractive businesses Toshiba has left today, but following their accounting scandal they desperately need to raise money to strengthen their balance sheet,” said Mark Newman, managing director and senior analyst at Sanford C. Bernstein in Hong Kong.
Toshiba’s medical equipment business makes diagnostic imaging systems.
Toshiba’s healthcare division, which includes medical equipment and other businesses that Toshiba does not plan to sell, had sales of ￥409.5 billion in the 12 months ended March last year and operating income of ￥23.9 billion, according to data compiled by Bloomberg.
Tokyo-based Canon, the world’s biggest camera maker, is expanding into new areas as smartphones with increasingly advanced imaging abilities eat into its business. It also makes printers and projectors.
Canon had ￥634 billion of cash and equivalents as of Dec. 31 last year, according to data compiled by Bloomberg.
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