Japanese conglomerate Toshiba has confirmed plans to split the company into three separate businesses, BBC reported. Toshiba said the three companies would be focused on infrastructure, semiconductors and devices.
The company has come under increasing pressure from activist investors to make changes since an accounting scandal in 2015, the report said. This week, US giant General Electric announced a similar strategy that will see the historic company broken up.
Toshiba’s plan will see it spin off two core businesses — its energy and infrastructure unit as well as its device and storage operation. After shedding those two companies, Toshiba will continue to own a 40.6 per cent stake in memory chipmaker Kioxia as well as other assets.
It expects to complete the reorganisation by the second half of 2023, the report said. The move is aimed to increase the stock market valuations of Toshiba’s different businesses after facing pressure from shareholders. But some analysts are concerned about the timescale for the changes.
“The move is in the right direction, but it seems slow,” said Atul Goyal of investment bank Jeffries, who would have preferred a timeline of three-to-six months, as per the report. “2023 is a long way out and we are not sure what else will change between now and then.”
Toshiba is one of Japan’s oldest and largest firms, with divisions that range from home electronics to nuclear power stations. However, the company has faced wrenching changes in recent years as it dealt with the fallout of an accounting scandal and huge losses linked to its US nuclear unit.
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