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Japan’s Toshiba says split-off into three firms is an option

06:58, 9 November 2021

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Toshiba's Europe offices in Neuss, Germany. Toshiba is a Japanese multinational conglomerate headquartered in Tokyo, Japan
Toshiba's Europe offices in Neuss, Germany – Photo: Shutterstock

Shares in Toshiba erased early gains to close over 2% lower on Tuesday as reports emerged that the Japanese conglomerate is planning to split itself into three companies focusing on infrastructure, devices and semiconductor memory chips.

Nikkei Asia Review on Monday reported that the three companies were expected to be listed by 2023.

On Tuesday, Toshiba said that it is in the “process of formulating its next mid-term plan to enhance corporate value, and a split, as stated in the press reports is one potential strategic option”.

Split into three

According to Nikkei Asia Review’s report, the company’s power stations and infrastructure assets would make up one company. Electronic devices would make up another.

Toshiba’s semiconductor business will make up the third company under its 40%-owned unit Kioxia Holdings, Nikkei reported.

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Toshiba has been targeted by activist investors who seek to achieve higher returns from its businesses.

Mid-term business plan awaited

Currently, over 70% of the shareholding in the company is under foreign ownership, after the company was forced to issue JPY600bn in new shares to foreign investors to prevent its delisting from the stock market in 2017.

Earlier in June, a shareholder-commissioned investigation report revealed that Toshiba worked with Japanese government officials to curb foreign investor influence in the company by preventing certain shareholders from exercising their voting rights at a 31 July annual general meeting.

Investors now await the announcement of a new mid-term business plan scheduled for 12 November, alongside its second-quarter earnings results.

Read more: Toshiba to ‘identify the root cause’ of AGM controversy

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