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A plan to divide the Japanese giant into three companies in order to raise the value of its shares

Toshiba said that the three companies will focus their businesses in the areas of infrastructure, semiconductors and devices.

The company has come under increasing pressure from activist investors to make changes since the accounting scandal that hit it in 2015.

This week, US giant General Electric announced a similar strategy.

major changes

Toshiba’s plan will see it move away from its two core businesses, the Power and Infrastructure unit, as well as the Inventory and Storage unit.

After the disposal of these two companies, Toshiba will continue to own a 40.6 percent stake in memory chip maker Kioxia, among other assets.

The restructuring is expected to be completed by the second half of 2023.

The move aims to raise the stock market value of various Toshiba businesses after facing pressure from shareholders. But some analysts are concerned about the timetable for the changes.

“It’s a step in the right direction but it seems slow. The road to 2023 is long and we’re not sure what else will change between now and then,” said Atul Goyal of investment bank Jefferies, which had favored a three- to six-month timetable.

Toshiba is one of the oldest and largest companies in Japan, with divisions ranging from household electronics to nuclear power plants.

However, the company has faced painful changes in recent years as it has dealt with the fallout from an accounting scandal and huge losses linked to its US nuclear unit.

In 2015, CEO and President Hisao Tanaka resigned after Toshiba said it exaggerated its profits by more than $1 billion.

In April of this year, British private equity firm CVC Capital Partners made a $20 billion takeover bid.

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The company’s CEO resigned in June after a shareholder revolt

A week later, CEO Nobuaki Kurumatani resigned, amid controversy over the bid. Then Toshiba rejected CVC’s offer, angering some activist shareholders.

The shareholder revolution saw the removal of Chairman Osamu Nagayama from his post last June.

dismantle clusters

On Tuesday, US General Electric announced that it would split into three separate companies.

The company said it will split its healthcare supplies business in early 2023 and combine its renewable, fossil fuel and digital units into one company that will be separated the following year, leaving the jet engine maker in a separate company, GE Aviation.

The move marks the disintegration of the iconic manufacturing company founded by Thomas Edison, which has grown into a sprawling business empire that was once the world’s most valuable company.