Toshiba Corp in process of selling its medical unit
17 March 2016
Scandal hit Japanese electronics maker Toshiba Corp is in the process of selling its medical unit to Japanese camera maker Canon Inc for ¥665.5 billion ($5.9 billion).
According to the companies, the deal had been completed. Canon which has been looking to expand its medical equipment business said the acquisition of Toshiba Medical Systems Corp as a 100 per cent-owned subsidiary would help.
Toshiba's forte in medicals are its X-ray and ultrasound systems.
Tokyo-based Toshiba had been hit by a major accounting scandal after it emerged that company officials had been fudging accounts for years after setting unrealistic earnings targets.
The company also had major problems on hand pertaining to its nuclear business after the March 2011 accident at a plant in Fukushima, northeastern Japan, which caused meltdowns at three reactors.
Toshiba Corp has lined up investments of ¥360 billion ($3.2 billion) on a new factory for flash memory chips even as it dealt with a record annual loss and the fallout from an accounting scandal.
The company was investing in the plant, which would make its proprietary 3D flash chips, over a period of three years till March 2019, it said in a statement Thursday. Toshiba expects output to begin no earlier than 2018.
Revelations in the summer that management had been complicit in padding profits over almost seven years led to massive writedowns and job cuts, and the company had to turn to asset sales to stem losses. US agencies are investigating losses at its nuclear power operations, Bloomberg reported, citing two people familiar with the matter.
Meanwhile, as the company seeks to focus on semiconductors, Toshiba chief executive officer said, Masashi Muromachi, the company was also considering spinning off its appliances and PC businesses.
Yukihito Uchida, a spokesman for the company said, annual capital spending on Toshiba's semiconductor and storage operations, which included hard drives, totaled to about 200 billion yen over the past three fiscal years.