The EC is calling Canon out for completing its $6 billion acquisition of the Toshiba unit before getting approval. Canon reported (PDF) $29.3 billion in sales during fiscal 2016. While Canon may have to cough up a $2.9 billion penalty, the European Union said in a statement that its investigation will not affect its approval of the merger, which was given in September 2016.
The commission said Canon used a two-step “warehousing” deal to take over Toshiba Medical Systems before securing approval for the merger.
In the first step, the EC said, an interim buyer picked up 95% of Toshiba Medical Systems shares, while Canon bought the remaining 5%. Canon also paid for options over the interim buyer’s stake. In the second step, Canon exercised its share options, thereby acquiring 100% of the shares.
In July, Japanese regulators OK’d the deal but voiced concerns that Canon potentially violated the law.
The European Commission sent complaints to three other companies, Bloomberg reported, including Merck KGaA and GE. They could be fined up to 1% of global sales for failing to provide information or giving misleading information.
"We need companies to work with us to ensure fast and predictable merger control, to the benefit of both companies and consumers,” said Commissioner Margrethe Vestager in the statement. “But we can only do our job well if we can rely on cooperation from the companies concerned—they must obtain our approval before they implement their transactions and the information they supply us must be correct and complete."