An announcement to investors issued by Fujifilm has revealed that the company’s $1.63bn acquisition of its rival Hitachi’s line of imaging products has been delayed as a result of the Covid-19 crisis.
Issued on 28 May, the two-paragraph statement cites “delays in some of the preparations due to the spread of infection” as cause for the postponement in the completion schedule for the transaction.
A new completion date was not provided by Fujifilm, but would be “promptly given as soon as fixed”. Originally, the deal was intended to complete in July 2020, having first been announced in December 2019.
Fujifilm’s medical imaging ambitions
The acquisition was expected to boost Fujifilm’s stake in the global medical imaging market, 65% of which is currently dominated by GE, Siemens and Philips. Hitachi’s portfolio of computed tomography (CT), magnetic resonance imaging (MRI) and ultrasound devices will eventually be transferred to Fujifilm, aligning with the company’s desire to boost its medical device business.
In November last year, Fujifilm purchased the remaining 25% stake in Fuji-Xerox that was owned by former joint venture partner Xerox US, giving it full ownership of the company, which it is transforming into a subsidiary business to develop new medical imaging products out of a combination of both companies’ existing technologies. The company has also launched a new systems integration business division, which will focus on image and data integration within the operating room.
Fujifilm was also reported in January to be looking to acquire Curium Pharma, a medical imaging supplies manufacturer, for around $3bn.
Meanwhile, Hitachi has said that after unloading its imaging assets it will turn its focus to global expansion of its particle therapy cancer treatment systems, in vitro diagnostic systems, regenerative medicine and medical IT platforms.
An industry-wide problem
It’s not just the Fujifilm-Hitachi deal that has been delayed. Pfizer and Mylan announced that the creation of a new company combining Mylan’s operations with Pfizer’s Upjohn division would be delayed until the second half of 2020. The deal was expected to close in the middle of this year, with Pfizer shareholders owning 57% of the company and Mylan shareholders owning 43%.
Covid-19 has caused deal delays throughout the global economy, with M&A at a near standstill by the end of March. M&A activity in the US has fallen by more than 50% in Q1 compared to 2019.