Canon to buy Toshiba's medical equipment unit for $5.9 billion

Tokyo: Canon Inc has agreed to buy Toshiba Corp's medical equipment unit for 665.5 billion yen ($5.9 billion), the companies said on Thursday.

Toshiba, which is selling the unit to help fund restructuring after a massive accounting scandal, said the deal would yield a profit of about 590 billion yen in the current fiscal year ending this month if it closes in time.

The Japanese maker of cameras and office equipment last week won exclusive negotiating rights to buy Toshiba Medical Corp in a hotly contested auction.

Canon, which makes X-ray machines and eye examination devices, has been trying for years to expand into high-margin medical devices, particularly as demand for cameras has declined with the advent of smartphones.

Funds from the deal will help enable Toshiba to drop plans to seek about $1.8 billion in additional loans from Sumitomo Mitsui Banking Corp, Mizuho Bank and Sumitomo Mitsui Trust Bank, sources familiar with the situation said on Tuesday.

But in a sign of yet more difficulty for Toshiba to overcome the multi-billion dollar accounting scandal, Bloomberg News reported U.S. authorities were investigating it over accounting related to its Westinghouse nuclear power operations.

The Justice Department and Securities Exchange Commission were looking into the possibility of fraud, the report said. Toshiba shares fell nearly 8 percent on Thursday after the report.