Troubled Japanese giant Toshiba to split into three companies
Electronics giant Toshiba, long-struggling over scandals and financial losses, announced Friday that it will split into three companies after investors pressured the Japanese company to boost its shares, French Press Agency reports.
The board approved a plan that will spin two companies off from the rest of Toshiba's operations within two years, with one focused on infrastructure and the second on devices, with both eventually being listed.
The firm said the decision would allow each business to "significantly increase its focus and facilitate more agile decision-making and leaner cost structures."
That would leave them "much better positioned to capitalize on their distinct market positions, priorities and growth drivers to deliver sustainable profitable growth and enhanced shareholder value," it added.
The decision, reported in Japanese media earlier this week, followed calls by activist investors who wanted "moves to shake the company up and get investors to reevaluate it and hopefully get a higher share price", said LightStream Research analyst Mio Kato, who publishes on Smartkarma.
The decision caps a period of tumult at the firm, once a symbol of Japan's advanced technological and economic power.
In June, shareholders voted to oust the board's chairman after a series of scandals and losses, in a rare victory for activist investors in corporate Japan.
The move followed the damaging revelations of an independent probe that concluded Toshiba attempted to block shareholders from exercising their proposal and voting rights.
It also detailed how the firm had pursued an intervention from Japan's Ministry of Economy, Trade and Industry to help sway a board vote.
And in April an unexpected buyout offer from a private equity fund associated with then-CEO Nobuaki Kurumatani stirred uproar, with allegations it was intended to blunt the influence of activist investors.
Other offers emerged subsequently, and Kurumatani resigned in April, though he insisted it was not related to the buyout controversy.
News.Az
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