The EU Commission fines 2-step merger for gun jumping because the full value of the majority stake was paid in the first step with minority rights thereby making the option certain to be exercised (Canon / Toshiba)

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The European Commission has published the full text of its decision to impose a €28 million fine (actually two €14 million fines) on Canon for breaching the standstill and notification obligations under EU merger control rules. The EC found that Canon partially implemented the transaction to acquire Toshiba’s medical equipment business (TMSC) before obtaining EC clearance. The decision has been eagerly awaited by practitioners for insights on the elements of the transaction structure used, which were considered objectionable, in particular as concerns two-step deals and pre-payment of consideration. Quick recap Canon’s acquisition of TMSC involved an aggressive warehousing structure. The parties’ internal documents showed this was specifically devised in order to address Toshiba’s

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  • Linklaters (London)

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Nicole Kar, The EU Commission fines 2-step merger for gun jumping because the full value of the majority stake was paid in the first step with minority rights thereby making the option certain to be exercised (Canon / Toshiba), 27 June 2019, e-Competitions June 2019, Art. N° 96851

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