Toshiba: Divides its activities into three companies

Japanese industrial giant Toshiba Corp today unveiled plans to split its business into three independent companies by splitting into two key industries – energy and infrastructure – as well as devices and storage media, according to Reuters.

Following the spin-off of the two companies, Toshiba will continue to hold a 40.6% stake in memory chip maker Kioxia as well as other assets.

The plan – after five months of strategic evaluation following a scandal in the giant corporate governance – is partly aimed at encouraging the outflow of activist investors, Reuters quoted sources familiar with the case as saying.

Satoshi Tsunakawa, the company’s chief executive, told Toshiba that the company would choose to split its activities regardless of the presence of activist investors. He also said that the Ministry of Commerce of Japan has not objected to the plan.

“The decision allows each unit to focus much more on its goals and facilitates a more flexible decision-making process as well as cost reduction in corporate structures,” the company said in a statement.

Toshiba plans to complete the reorganization of its operations by the second half of the fiscal year 2023. It also announced that it plans to return approximately 100 billion yen ($ 875 million) to its shareholders within the next two fiscal years.

The latest results of the giant showed that the company continues to draw momentum from the recovery of the economy after the recession due to the coronavirus pandemic. In particular, for the second quarter, Toshiba announced that its operating profit almost doubled, reaching 30.4 billion yen.