- Toshiba Corporation announced on November 12 that it will divide its business into three entities.
- Toshiba’s move is seen as a conciliatory move aimed at placating shareholders seeking a major revamp of the company following several scandals.
- Toshiba has given its approval to joining its infrastructure and energy units into a single business, with its hard disk drives and semiconductor devices forming a second company.
TOKYO, Japan: Toshiba Corporation announced on November 12 that it will divide its business into three entities, a conciliatory move aimed at placating shareholders seeking a major revamp of the company following several scandals.
An uncommon step in a nation where corporations reign supreme, news of the Tokyo-headquartered company being divided came to light within days of American manufacturer General Electric declaring it was dividing itself, while Johnson and Johnson also made an announcement of a split.
Established in 1875, Toshiba has given its approval to joining its infrastructure and energy units into a single business, with its hard disk drives and semiconductor devices used in power electronics forming a second company. The third unit will be tasked with the management of Toshiba Corporation’s share in Kioxia Holdings, as well as other assets.
The idea of splitting the company up, which originated following a calculated evaluation spanning a period of five months following an exceedingly detrimental and scandalous corporate governance incident, in which the company was found to have colluded with the government to suppress the interests of foreign investors.
Nevertheless, this division contradicts demands from some shareholders for taking the problem-ridden firm private. Still, some major shareholders believe that this plan might have difficulties receiving approval at the March shareholders meeting.
The revamp announcement came following the closing of Japanese markets, though a four-percent fall in Toshiba shares was recorded on the Frankfurt Stock Exchange at opening on November 12, thereby indicating dissatisfaction among investors.
“After much discussion, we reached the conclusion that this strategic reorganisation was the best option,” Toshiba President Satoshi Tsunakawa stated at a press conference.
