HONG KONG – Fujifilm Corp. has entered an agreement with Hitachi Ltd. to acquire Hitachi Ltd.’s diagnostic imaging-related business to further expand Fujifilm’s health care business. Prior to the acquisition, Hitachi will found a new company and implement an absorption-type company split whereby the new company will absorb the business. Under the agreement the two Tokyo- headquartered companies signed on Dec. 18, Fujifilm will acquire all the outstanding shares of Hitachi’s new company. The purchase price is expected to be about ¥179 billion (US$1.64 billion), according to Fujifilm.

The new company’s name will be Fujifilm Healthcare Corp., headquartered in Chiba, Japan. Its capital will be ¥45 million, and the shares will be wholly owned by Hitachi.

“We are expecting the completion of acquisition around July 2020, after customary closing conditions and regulatory approvals,” Shohei Kawasaki from the Corporate Communications Division of Fujifilm told BioWorld MedTech.

The companies are not disclosing other details about the acquisition, such as restructuring,  at the moment.

The new company will be focused on the R&D, manufacturing, sales and maintenance service of diagnostics imaging systems such as computerized tomography (CT), magnetic resonance imaging (MRI), X-ray systems, ultrasound and electronic health records. The Hitachi business had revenues of ¥143.2 billion, as of the fiscal year ended March 2019.

Hitachi will post an extraordinary gain of approximately ¥107 billion in gains from the sale for the fiscal year ending March, 2021. In addition, Hitachi plans to record a gain from business reorganization and others of approximately ¥111.0 billion in the same year.

Expected synergies

By applying its image processing and AI technologies to Hitachi’s product lineup, Fujifilm aims to expand its medical systems business, add new value in its medical care quality and leverage its global sales network. Specifically, there are three synergies expected by the acquisition, according to Fujifilm.

The first one is providing one-stop solutions for medical institutions through a comprehensive product line-up. The line-up includes CT, MRI diagnostics imaging, medical IT, in vitro diagnostics and endoscopy. Also, Fujifilm expects it will be able to grow new business that will generate synergies between the medical systems business and other businesses such as pharmaceuticals and regenerative medicine.   

The second hoped-for synergy is providing innovative solutions by leveraging Fujifilm’s image processing and AI technologies. AI technology used on CT images can provide better image quality in low-dose examinations. Also, by enhancing access to high-quality diagnostic data, Fujifilm expects to expand its new fields, such as AI-supported diagnosis.

The third improvement is in expanding the global sales capability using the two companies’ sales channels. 

Since its launch of an X-ray system in 1953, Hitachi has provided medical solutions using diagnostics imaging systems, IT and electronic health records. The diagnostic imaging systems business manufactures six MRI systems products, four CT systems, three X-ray systems, and 16 ultrasound systems products.

The company is one of the major global manufacturers of ultrasound systems. Hitachi developed the first diagnostic ultrasound system in 1960, the first cardiac color doppler in 1983, and practical capacitive micromachined ultrasonic (CMUT) transducers in 2009. Since 2017, it has been producing premium ultrasound scanners.  

Its buyer, Fujifilm, is a global leader in the X-ray diagnostics field. Since its first launch of an X-ray film product in 1936, the company has been focused on X-ray imaging and diagnostic systems. It currently leads the global digital imaging market, with its Fuji Computed Radiography (FCR) products. The company’s medical imaging system, Synapse, is installed in around 3,600 medical institutions worldwide. 

Fujifilm also develops endoscopy systems. To prevent the gagging caused by conventional endoscopes given through the mouth, the company provides double-balloon enteroscopy and capsule endoscopy systems for intestinal examinations.

To expand the diagnostics spectrum of its business, Fujifilm has acquired a number companies. In 2011, it acquired the U.S. firm Sonosite Inc., a bedside and point-of-care ultrasound technology developer, to strengthen Fujifilm’s hand-carried ultrasound equipment business as a strategic pillar for Fujifilm’s medical systems business growth. In addition, Fujifilm acquired Japan’s nuclear medicine developer Daiichi Radioisotope Laboratories Ltd. in 2006 to expand its diagnostic radiopharmaceutical business.

Fujifilm has also moved into the development of low-molecular drugs, biopharmaceuticals and regenerative medical products. The company operates its own pharmaceutical & healthcare research laboratories to accelerate new drug R&D.

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