EUROPEAN COMMISSION DG Competition CASE M.8179 – CANON/TOSHIBA MEDICAL SYSTEMS CORPORATION (Only the English text is authentic) MERGER PROCEDURE REGULATION (EC) 139/2004 Article 14(2) Regulation (EC) 139/2004 Date: 27/06/2019 This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets. EUROPEAN COMMISSION Brussels, 27.6.2019 C(2019) 4559 final PUBLIC VERSION COMMISSION DECISION of 27.6.2019 imposing fines for failing to notify a concentration in breach of Article 4(1) of Council Regulation (EC) No 139/2004 and for implementing a concentration in breach of Article 7(1) of that Regulation (Case M.8179 - Canon / Toshiba Medical Systems Corporation, Article 14(2) procedure) (Only the English version is authentic) TABLE OF CONTENTS 1. Factual Background ..................................................................................................... 4 1.1. The Undertakings Concerned ....................................................................................... 4 1.2. The Canon/TMSC transaction ...................................................................................... 5 1.2.1. The circumstances which led Toshiba to sell TMSC ................................................... 5 1.2.2. The setting up of the transaction structure ................................................................... 6 1.2.3. The agreements implementing the transaction structure .............................................. 7 1.2.3.1. Setting up of MS Holding ............................................................................................ 7 1.2.3.2. Conversion of TMSC shares and creation of new classes of shares ............................ 7 1.2.4. The rights attached to the different classes of shares ................................................... 8 1.2.4.1. Class A Shares.............................................................................................................. 8 1.2.4.2. Class B Shares .............................................................................................................. 8 1.2.4.3. So-called Share Options attached to Class C Shares ................................................... 9 1.2.5. The implementation of the various agreements between MS Holding, Toshiba, and Canon ......................................................................................................................... 10 1.3. Merger control proceedings before the Commission regarding the Concentration ... 12 2. Infringement Proceedings Under Article 14(2) of the Merger Regulation ................ 13 3. Legal Framework ....................................................................................................... 15 3.1. Articles 4(1) and 7(1) of the Merger Regulation and their objectives ....................... 15 3.2. The notion of “concentration” in the Merger Regulation .......................................... 17 3.3. The notion of “implementation” pursuant to Articles 4(1) and 7(1) of the Merger Regulation .................................................................................................................. 19 4. Application to the Case .............................................................................................. 23 4.1. The Interim Transaction and the Ultimate Transaction together constitute a single concentration .............................................................................................................. 23 4.1.1. The Interim Transaction was only undertaken in view of the Ultimate Transaction . 24 4.1.1.1. Canon’s arguments ..................................................................................................... 24 4.1.1.2. The Commission’s findings ....................................................................................... 24 4.1.2. The sole purpose of MSH was to facilitate the acquisition by Canon of control over TMSC ......................................................................................................................... 27 4.1.2.1. Canon’s arguments ..................................................................................................... 27 4.1.2.2. The Commission’s findings ....................................................................................... 27 4.1.2.2.1.Canon actively participated in the setting up of MS Holding ................................... 28 4.1.2.2.2. MS Holding had no economic interest in TMSC beyond its role as interim buyer for which it was remunerated at a fixed price .................................................................. 30 4.1.3. Canon was the only party that could determine the identity of TMSC’s ultimate acquirer and bore the economic risk of the overall operation as of the Interim Transaction ................................................................................................................. 31 2 4.1.3.1. Canon’s arguments ..................................................................................................... 31 4.1.3.2. Commission’s findings............................................................................................... 32 4.1.4. Conclusion.................................................................................................................. 35 4.2. The Interim Transaction contributed to a lasting change of control over TMSC ...... 35 4.2.1. Canon’s arguments ..................................................................................................... 35 4.2.2. The Commission’s findings ....................................................................................... 36 4.2.3. Conclusion.................................................................................................................. 40 4.3. The Concentration was implemented before notification to and clearance by the Commission................................................................................................................ 40 4.3.1. Canon partially implemented the Concentration before notification to the Commission in breach of Article 4(1) of the Merger Regulation .............................. 40 4.3.2. Canon partially implemented the Concentration before clearance by the Commission in breach of Article 7(1) of the Merger Regulation ................................................... 41 4.3.3. Conclusion.................................................................................................................. 41 4.4. Canon acted at least negligently ................................................................................. 41 4.4.1. Canon’s arguments ..................................................................................................... 41 4.4.2. The Commission’s findings ....................................................................................... 41 4.4.3. Conclusion.................................................................................................................. 43 5. Fines ........................................................................................................................... 43 5.1. The nature of the infringements ................................................................................. 44 5.1.1. Canon’s arguments ..................................................................................................... 44 5.1.2. The Commission’s findings ....................................................................................... 45 5.1.3. Conclusion.................................................................................................................. 46 5.2. The gravity of the infringements ................................................................................ 46 5.2.1. Canon’s arguments ..................................................................................................... 46 5.2.2. The Commission’s findings ....................................................................................... 46 5.2.3. Conclusion.................................................................................................................. 47 5.3. The duration of the infringements .............................................................................. 47 5.3.1. Canon’s arguments ..................................................................................................... 47 5.3.2. The Commission’s findings ....................................................................................... 47 5.3.3. Conclusion.................................................................................................................. 49 5.4. Mitigating and aggravating circumstances ................................................................. 49 5.4.1. Mitigating circumstances ........................................................................................... 49 5.4.2. Aggravating circumstances ........................................................................................ 49 5.5. Conclusion.................................................................................................................. 49 6. Amount of the fines .................................................................................................... 49 3 COMMISSION DECISION of 27.6.2019 imposing fines for