Toshiba has bid farewell to the Tokyo exchange after 74 years, marking the end of an era marred by a decade of turmoil and scandal that tarnished one of Japan’s major brands.
The conglomerate is now set to transition into private ownership through a $14 billion takeover led by a consortium of investors, including private equity firm Japan Industrial Partners (JIP), financial services firm Orix, utility Chubu Electric Power, and chipmaker Rohm, Reuters reported.
The delisting comes after prolonged battles with overseas activist investors, bringing Toshiba’s diverse portfolio, encompassing batteries, chips, and nuclear and defence equipment, under the control of domestic hands.
In a statement, Toshiba expressed its anticipation of a “new future with a new shareholder” and sought continuous understanding and support from stakeholders.
While the exact trajectory under its new owners remains uncertain, Chief Executive Taro Shimada, retained after the buyout, is expected to steer Toshiba toward high-margin digital services. The shift in ownership prevented an earlier plan involving a state-backed fund, and industry insiders suggest that potential divestitures may be considered to enhance Toshiba’s strategic positioning.
Toshiba’s challenges, as noted by Damian Thong, head of Japan research at Macquarie Capital Securities, stemmed from a mix of strategic missteps and unfortunate circumstances. As the company undergoes this transformation, the hope is that its assets and human talent, through divestitures, find new avenues to unleash their full potential.
With four JIP executives, alongside representatives from Orix, Chubu Electric, and Sumitomo Mitsui Financial Group, joining the board, Toshiba’s transition under new management is already underway. Strategic collaborations, such as the $2.7 billion investment with Rohm in manufacturing facilities for power chips, signify the company’s proactive approach in reshaping its future.
As Toshiba navigates its path forward, there is a critical need to exit lower-margin businesses and strengthen commercial strategies for advanced technologies.
(With inputs from Reuters)