The EU Commission imposes a €28M fine on a Japanese manufacturer of imaging and optical products for gun-jumping (Canon / Toshiba Medical Systems)

On 27 June 2019 the European Commission imposed a fine of €28 million on the Japanese imaging and optical products manufacturer Canon for “gun-jumping” by using a warehousing structure in its 2016 acquisition of Toshiba Medical Systems (TMS), and this comes two years after the Commission announced that it had opened an investigation. Canon has announced that it will appeal the fine. This decision has important implications for companies wishing to structure the sale of a business so that signing and closing take place simultaneously, despite the buyer needing to obtain regulatory approvals or achieve other gating items before taking full control of the target. What Happened? ‘Warehousing’ or ‘parking’ arrangements involve splitting a sale into two steps. The target business is