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BRUSSELS — Japanese camera and printer maker Canon on Wednesday lost its challenge to an EU fine of 28 million euros ($29.4 million) after Europe’s second highest court upheld the sanction imposed for misfiring the gun at an acquisition in 2016.

Companies that close a deal without first obtaining approval from EU regulations or provide misleading information during the regulatory review could face fines under EU merger rules of up to 10% of their total turnover.

The European Commission said in its 2019 decision that Canon has broken the rules by using a so-called two-step “warehousing” transaction structure where an interim buyer buys Toshiba Corp’s medical unit before it receives regulatory approval.

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The unorthodox method allowed Toshiba, who struggled for money after an accounting scandal, to record revenues in time for the end of the fiscal year that ended in March.

The Luxembourg-based General Court supported the finding of the EU competition regulator.

“The (European) Commission has therefore rightly noted that the Court’s case law makes a distinction between the terms ‘concentration’ and ‘implementation of a concentration’”, according to the judges.

In a recent gun-jumping case, the EU competition watchdog ordered US life science company Illumina’s to keep cancer-detection test maker Grail Inc as a separate company after the former finalized the deal while still waiting for the legal green light. . The case is still pending.

In recent years, the Commission has fined Meta, General Electric and German drugmaker Merck KGaA for providing misleading information during reviews of their deals.

The case is T-609/19 Canon V Commission.

($1 = 0.9515 euros) (Reporting by Foo Yun Chee; Editing by David Evans)

This post Canon loses lawsuit against EU takeover fine in 2016

was original published at “https://financialpost.com/pmn/business-pmn/canon-loses-court-challenge-against-eu-fine-over-2016-acquisition”