(Reuters) — Canon (NYSE:CAJ) shares fell to their lowest levels in more than two months today after European regulators said they may fine it up to 10% of annual revenue for jumping the gun in its acquisition of Toshiba’s (TYO:6502) medical unit.
The European Union Commission said it had reached a preliminary view that Canon breached rules by using a so-called “warehousing” two-step transaction structure involving an interim buyer to buy the company prior to obtaining relevant approvals.
Ten percent of Canon’s annual revenue would be roughly equivalent to $2.9 billion.
The $6 billion deal, completed late last year, raised eyebrows at the time due to the unorthodox method which allowed Toshiba, which was struggling for cash after an accounting scandal, to book proceeds in time for the financial year-end in March.
At the time, rival bidder Fujifilm Holdings (TSE:4901) criticized the deal as a “mockery of the law.”
Canon said in statement that it would respond appropriately, but declined further comment before regulators make their final decision.
Canon shares closed down -3.8% at ¥3,652.00 ($32.10) apiece today in Tokyo, their lowest level since May 1. The stock was the fifth-most traded stock by turnover.
EU regulators also accused GE Healthcare (NYSE:GE) and German drugmaker Merck (NYSE:MRK) yesterday of providing misleading information during separate merger deals.
Facebook (NSDQ:FB) was hit with a €110 million ($125 million) fine in May for providing misleading information during the EU review of its messaging service WhatsApp purchase in 2014. Last month, EU antitrust regulators hit Alphabet (NSDQ:GOOGL) unit Google with a record 2.4-billion-euro fine for favouring its own shopping service.
($1 = €0.8766; $1 = ¥113.757)