Japanese Toshiba creates power and units of computing devices
Japanese tech conglomerate Toshiba said on Friday it was restructuring to improve its competitiveness, divesting its energy infrastructure and computing device businesses.
Fallout from the energy infrastructure will include the nuclear power operations of Tokyo-based Toshiba Corp., including dismantling efforts at the Fukushima nuclear power plant which suffered amalgamations after an earthquake and tsunami in March. 2011.
The energy business will also include the company’s sustainable energy and battery business. Its annual sales total approximately 2,000 billion yen ($ 18 billion).
The other spin-off and stand-alone business encompasses Toshiba’s computer peripherals and storage operations, with annual sales of 870 billion yen ($ 7.6 billion).
Toshiba will remain a third independent company, owning what remains like its flash memory company Kioxia Holdings Corp. and Toshiba Tec Corp., which manufactures office equipment.
Such a major restructuring is unusual for a large Japanese company. But Toshiba isn’t alone in deciding that a sprawling conglomerate may not be the best fit for the times.
Earlier this week, General Electric announced that it was splitting into three public companies, focused on aviation, healthcare and energy. Like Toshiba, GE struggled under its own weight and decided to rationalize its core business after a long review.
Toshiba said its restructuring will be completed by March 2024. The separation of the companies’ financial results will begin from this fiscal year, he said.
General Manager Satoshi Tsunakawa said the two types of businesses created were very different, with the business cycle of devices much faster than infrastructure, and the business of devices requiring heavy investment.
âThis will unlock immense value by removing complexity, it will allow companies to have much more focused management, facilitating agile decision-making, and the separation naturally improves shareholder choices,â Tsunakawa said of the news. structure.
The decision has yet to be approved by shareholders. A shareholders’ meeting will be held early next year, Tsunakawa said.
In a statement to shareholders, Toshiba said its “bold and ambitious plan” followed a five-month review by the board’s strategic committee.
The management teams and the names of the spin-offs will be announced later, according to Toshiba. He said adjustments to its operations and staffing were still undecided.
Earlier on Friday, Toshiba issued a statement promising to strengthen its corporate governance. An investigation by a governance group did not reveal any illegality, but some executives engaged in questionable practices related to blocking the opinions of certain shareholders.
Toshiba has periodically encountered governance issues, including a scandal in 2015 over accounting books that have been falsified for years to inflate profits.
Since then, the company has cut thousands of jobs and sold pieces of its sprawling business.
Also on Friday, Toshiba reported a profit of 41.8 billion yen ($ 367 million) for July-September, more than double the profit of 14.8 billion yen recorded a year earlier.
Officials said the better results reflected restructuring efforts and improved sales. Quarterly sales increased 6% year on year to 818.5 billion yen ($ 7.2 billion).
Toshiba forecast 130 billion yen ($ 1.1 billion) in profit for the fiscal year through March 2022, increasing its earlier projection by 20 billion yen ($ 175 million), from 114 billion yen in profit posted a year earlier.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama