Toshiba Medical Systems, the medical device business Toshiba (TYO:6502) is selling to Canon (NYSE:CAJ) for $6.5 billion, reportedly entered the race to acquire a chemicals subsidiary of Takeda Pharmaceutical (TYO:4502).
The Nikkei business daily reported today that Takeda is looking to sell its 70% stake in Osaka-based Wako Pure Chemicals Industries, with the 1st round of bidding closing August 16.
Toshiba Medical is competing with Hitachi (NYSE:HIT) and Fujifilm Holdings (TSE:4901) to compete for Wako Pure, the Japanese newspaper reported. Wako Pure, which makes lab chemicals and diagnostic reagents, posted sales of ¥75.7 billion ($755 million) last year.
Anti-trust regulators in Japan approved the Toshiba Medical Systems sale to Canon in June, but warned about the deal’s questionable structure.
Toshiba managed to book the sale before the deal actually closed by setting up a holding company with just $300 in assets to skirt Japanese anti-trust regulations. Japan’s Fair Trade Commission said the method may be in violation of antitrust laws, but declined to issue a fine and approved the deal anyway. The U.S. Justice Dept. and the SEC are also investigating the accounting practices at Toshiba’s U.S. businesses.
Toshiba in March granted Canon exclusive negotiating rights to buy Toshiba Medical after a hotly contested auction. The ¥665.5 billion sale of Toshiba Medical Systems follows the February announcement that Toshiba would sell the entire medical equipment unit rather than just a controlling stake. A bidding war soon developed among a slew of private equity players and rival corporations. Toshiba has also said that it would either shut down or transfer all of its other healthcare businesses by the end of March.
The deal provided much-needed liquidity for Toshiba, which is facing mounting restructuring costs after a $1.3 billion accounting scandal. Toshiba Medical Systems put up sales of $3.60 billion (¥405.6 billion) during fiscal 2015, which ended in March of that year.
($1 = ¥100.3300)
Material from Reuters was used in this report.