Toshiba plans to split into three separate companies. To do this, the Japanese tech group is divesting its energy and infrastructure, and device and storage divisions. Toshiba itself will continue as a shareholder in other tech companies.
According to Reuters, the major structural change is prompted by a series of problems Toshiba faced in recent years. These problems include a major accounting scandal in 2015, and more recently, a corporate governance scandal in which the company’s top actively pursued policies against critical shareholders. These shareholders allegedly wanted to stop the reappointment of the company’s former CEO, very much against the wishes of the company’s board.
Split into three parts
After investigation, Toshiba concluded that splitting up would be the best way to regain the trust of shareholders and encourage critical shareholders to sell their shares.
In the Separation Plan, Toshiba proposes to split the tech group into three parts. The current energy and infrastructure division and the device and storage division will continue independently within the group. Toshiba itself will then mainly manage the interests in the various companies in which it participates. Chip manufacturer Kioxia for example, in which it holds a stake of 40 percent.
Toshiba’s opinion
Toshiba itself indicates that the proposed restructuring plans should indeed bring more value to shareholders. This can only be done by allowing each business unit to concentrate more on its own activities, so that decision processes run faster and costs are saved.
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