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Updated December 20th, 2023 at 08:58 IST

Toshiba delisted after 74-year run, faces future with new owners

Toshiba shares concluded their last trading day marginally lower at 4,590 yen.

Business Desk
Toshiba
Toshiba | Image:Unsplash
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End of an era: After 74 years on the Tokyo exchange, Toshiba was officially delisted on Wednesday, marking the end of a tumultuous decade that witnessed scandals and changes for one of Japan's prominent brands. 

The conglomerate is now transitioning to private ownership through a $14 billion takeover led by a consortium of investors, with Japan Industrial Partners (JIP) as the primary private equity firm. 

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Other participants in the buyout include financial services firm Orix, utility company Chubu Electric Power, and chipmaker Rohm.

The move brings Toshiba under domestic control, concluding prolonged struggles with foreign activist investors that had impeded the company's operations in batteries, chips, nuclear technology, and defence equipment. 

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Toshiba, via a statement, said its commitment to forging a new future with its new shareholders and sought continuous understanding and support from stakeholders.

Toshiba shares concluded their last trading day marginally lower at 4,590 yen.

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While the ultimate shape of Toshiba under its new owners remains uncertain, Chief Executive Taro Shimada, retaining his role post-buyout, is expected to prioritise high-margin digital services.

The support from JIP for Shimada disrupted earlier plans for collaboration with a state-backed fund, leading some industry experts to suggest that splitting up Toshiba could be a more viable option.

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The complex restructuring involves the addition of four JIP executives to the board, along with representatives from investors Orix and Chubu Electric. The new management team will also include a senior adviser from Toshiba's primary lender, Sumitomo Mitsui Financial Group.

With approximately 106,000 employees and certain operations deemed critical for national security, the Japanese government will closely monitor the transition.

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Already initiating post-buyout activities, Toshiba has partnered with Rohm to invest $2.7 billion in manufacturing facilities for joint production of power chips.

To secure a stronger position, experts suggest Toshiba needs to divest from lower-margin businesses and formulate robust commercial strategies for its advanced technologies. 

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Despite past challenges, Toshiba is recognised as a "deep tech company" with the potential for breakthrough innovation if managed strategically.

(With Reuters Inputs)

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Published December 20th, 2023 at 07:46 IST

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