Japanese tech giant Toshiba Corporation is splitting into two standalone companies, both of which will be publicly traded.
The corporation’s separate entities will now consist of– Toshiba/ Infrastructure Service Co., comprising Toshiba’s Energy Systems & Solutions, Infrastructure Systems & Solutions, Digital Solutions and Battery businesses, in addition to Toshiba’s ownership stake in Kioxia Holdings Corporation; and Device Co. 1, consisting of Toshiba’s Electronic Devices & Storage Solutions business.
This comes following the company’s previous decision to split the company into three parts, with the third part being a independent entity for infrastructure operations. However, this plan was disapproved by shareholders.
“The decision to separate into two independent, publicly traded companies is the result of the Toshiba Board of Directors’ continued and thorough review of the strategic reorganization plan and process, as well as the Company’s extensive engagement with shareholders, regulators and other stakeholders,” the company said in a statement.
Infrastructure Service Co.’s products and services will include power generation, transmission and distribution, renewable energy, energy management, systems solutions for public infrastructure, railways and industry, and IT solutions for government agencies and private companies.
While maximizing shareholder’s value, Toshiba will immediately monetize its shares in KHC to the extent which is practically possible to conduct, and will return the net proceeds in full to shareholders, within the limits stipulated by applicable laws and regulations.
Device Co.’s products will include power semiconductors, optical semiconductors, analog integrated circuits, high-capacity HDD for data centers (nearline HDDs) and semiconductor manufacturing equipment.
Satoshi Tsunakawa, Interim Chairperson, President and Chief Executive Officer of Toshiba, said: “After further engaging with key stakeholders and completing the additional analysis, we determined that separating Toshiba into two standalone companies and divesting certain non-core assets is in the best long-term interests of our Company and its shareholders, customers, business partners and employees… We will be able to deliver these benefits while providing a clearer path to completion, reducing the associated costs, maintaining tax-free status and keeping to our stated timeframe of completing the spin-off in the second half of FY2023.”
