Toshiba splits into two companies instead of three, following “wide engagement with shareholders”


Toshiba has split into two independent companies, said electronics makers after earlier on Monday announcing their intention to split the company into three.

The two listed companies will consist of Toshiba Infrastructure Services, which covers energy, transportation, batteries and more. In addition to Toshiba’s ownership of Kioxia Holdings, Inc., devices that cover digital devices, semiconductors, and storage.

If approved, the restructuring is expected to be completed by the second half of 2023.

Toshiba decided to split into two companies: “Toshiba’s board of directors continuously and thoroughly reviews its strategic restructuring plans and processes, with a wide range of shareholders, regulators and other stakeholders. It is the result of such involvement. “

The company added that it believes this decision is the fastest and most effective way to achieve sustainable and profitable growth and increase shareholder value.

In addition, Toshiba has designated TOSHIBA TEC, which is a listed electronic device business, as a non-core business, and in the short term, will cooperate with TOSHIBA TEC to “promote TOSHIBA TEC’s own medium- to long-term business plan.” This designation. “

The Japanese company also agreed to sell the shares of the joint venture of Toshiba Carrier Co., Ltd. to the carrier group for about 100 billion yen ($ 869 billion).

In addition, Toshiba Elevator Building Systems and Toshiba Lighting & Technology (Toshiba Lighting & Technology) are “progressing sales plans.”

In the next few years, Toshiba is expected to reduce 300 billion yen (about 26 billion dollars) to shareholders as part of the plan, which is still subject to the approval of shareholders and regulatory authorities.

In November, Toshiba announced a plan to split into three parts under tension between management and overseas shareholders.

The move came after many years of scandals, including the 2015 accounting scandal, as well as the exposure that Toshiba clashed with Japan’s Ministry of Trade to prevent investors from gaining influence at last year’s shareholders’ meeting. ..

However, the plan was hit by fierce opposition from shareholders, including Toshiba’s second-largest investor, the Singapore Fund’s 3D investment partner.

In an open letter in January, 3D Investment branded the process behind the plan as “defective,” and therefore stated that the recommendations were “unreliable.”

Satoshi Tsunakawa Interim Chairman, President and Chief Executive Officer of Toshiba (CEO) on Monday, “Relations with key stakeholders, has completed an additional analysis,” it said determined after has been made.

The separation, along with the sale of certain non-core assets, “for the long-term interests of our company and its shareholders, customers, business partners, and employees,” said Tunakawa.

“Sophisticated strategic restructuring plans create two distinctive companies that are well-positioned to leverage their unique strengths and business cycles. While providing these benefits, the path to completion is clear and relevant. You can reduce costs, maintain tax exemption status, and maintain a defined period of completion of the spin-off in the second half of 2023. “

However, Mr. Tsunakawa has denied that the separation was prompted by pressure from shareholders.

“We haven’t changed our plans to avoid conflict with shareholders,” Reuters told the briefing.

Paul J. Blow, Independent Director and Chairman of Toshiba’s Strategic Review Board, added that stakeholder feedback is “an important part of any strategic process.”

“The improvement in the separation plan reflects an open and solid conversation with shareholders and other stakeholders,” he said.

Toshiba’s share price rose after the announcement, with Monday trading up 0.98% to $ 20.78.

Catabella Roberts

follow

Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.