Toshiba has officially decided to split into two smaller companies after months of internal wrangling.
The two independent companies, which will be listed on the stock exchange, will be: Infrastructure Service, which covers energy, transportation, batteries and other areas; and Device, which covers digital, semiconductor and storage devices.
As reported by Bloomberg, the original plan, which faced shareholder opposition, was to separate its infrastructure operations, which will now continue under Toshiba.
Go ahead and face up
The iconic Japanese company has come under increasing pressure in recent years following a series of scandals and mismanagement. An expensive expansion of nuclear power, for example, forced the company to sell its crown jewel semiconductor business.
"After continuing our discussions with key stakeholders and performing ancillary analysis, we have determined that separating Toshiba into two separate companies and selling certain non-core assets is in the best long-term interests of our company and its shareholders, customers service, business partners and employees," said Toshiba CEO Satoshi Tsunakawa.
"The refined strategic reorganization plan creates two different companies that are well positioned to take advantage of their unique strengths and economic cycles," he continued. “We will be able to deliver these benefits while providing a clearer path to completion, reducing associated costs, sustaining tax-exempt status, and meeting our timeline to fill the division through the second half of fiscal year 2023.” .
Investors greeted the new approvingly, including companies that had amassed notable situations to influence the change at Toshiba. 3D Investment Partners, which has a 3% stake, pushed for a split into XNUMX companies that require a two-thirds majority.
Over the next several years, Toshiba plans to return XNUMX million yen (about XNUMX billion US dollars) to shareholders under the plan. The company is also going to sell a XNUMX% stake in its air conditioning business to a US conglomerate for about XNUMX billion yen (about XNUMX million US dollars).
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