Toshiba sells medical unit to Canon Inc.
March 23, 2016
TOKYO – Toshiba Corp. sold its medical unit to another Japanese electronics giant, Canon Inc., for $5.9 billion. Canon said in a statement that its acquisition of Toshiba Medical Systems Corp. as a 100 percent-owned subsidiary would aid its ambition to expand its medical equipment business.
Toshiba Medical’s strengths are in X-ray and ultrasound systems. The company also produces MRI scanners.
Tokyo-based Toshiba has been struggling with a major scandal over disclosures that company officials doctored accounting books for years after setting unrealistic earnings targets.
The company also is facing major problems in its nuclear business after the March 2011 accident at a plant in Fukushima, northeastern Japan, which sent three reactors into meltdowns.
Because of a public outcry amid doubts about the technology’s safety, all but two power reactors in Japan remain shut down. Toshiba’s electronics devices operations have also taken a hit because of intensifying competition and dropping sales.
The Associated Press reports that for the fiscal year through March, the company is forecasting a $6.3 billion loss, even bigger than its initial projection. It will be the company’s second year of red ink.
Toshiba’s chief executive resigned last year to take responsibility for the scandal. But efforts to reform corporate governance have turned up even more accounting wrongdoing.
Japanese corporate culture, with its emphasis on consensus, has often been blamed for systematic cover-ups at Japan’s most prestigious companies, including Olympus Corp. and Mitsubishi Motors Corp.
Unlike some Western accounting scandals, such scandals in Japan did not result in enrichment of individual employees. Instead, workers collaborated to “save face” for the company.