Toshiba splits company in two and sells shares of subsidiaries
Japanese tech company Toshiba plans to split the company into two: one company that focuses on infrastructure services, such as energy, transportation and batteries, and one company that focuses on devices, which also includes services, semiconductors and storage.
The company writes this in a message to shareholders. The two companies will be listed as separate entities on the Tokyo Stock Exchange. Earlier plans to split the company into three were met with much criticism from shareholders. As a result, the tech giant has decided to split the company in half and divest some of the company’s “non-core” parts.
Toshiba Infrastructure Service Co. will focus on energy systems, infrastructure, transportation and the batteries and batteries that Toshiba develops. It will also include the majority stake in memory chip manufacturer Kioxia Holdings Corporation. Toshiba will immediately sell its stake in Kioxia to accommodate Toshiba shareholders. According to Bloomberg, that could mean that Kioxia goes public or that Toshiba sells the stock to Western Digital. According to Bloomberg, talks have been going on for some time to merge Kioxia with Western Digital.
The other company will be Device Co., which will include semiconductor products, data center hard drives, and semiconductor manufacturing equipment. The plan is to separate this company from Toshiba by the middle of fiscal 2023.
Toshiba will divest all other business units and subsidiaries. This concerns his majority stake in the air-conditioning company Toshiba Carrier Corporation. It will be bought by joint venture partner Carrier Group for around 760 million euros. The company will stop investing in Toshiba Elevator and Bulding Systems Corporation and Toshiba Lighting & Technology Corporation. It will also divest Toshiba Tec Corporation, the business unit that focuses on office equipment, such as printers.
Techradar explains that things have been bad for Toshiba for a while. This would be due to mismanagement, a number of scandals and a failed move to nuclear power, forcing the company to put its semiconductor business up for sale.