Toshiba has revised its restructuring plans and decided to split into two companies instead of three: Infrastructure Service Co. and Device Co. The first will be in charge of infrastructure systems and solutions, digital solutions and batteries and chips within the Kioxia business. Device Co. will develop power semiconductors, electronic devices and storage, high-capacity hard drives and analog integrated circuits.
The restructuring is scheduled for the second half of fiscal 2023. Toshiba hopes that this process will help the corporation achieve sustainable profits and increase shareholder value.
Toshiba currently has seven major divisions, including the infrastructure division, which deals with public transportation, water and sewage systems, and elevators. The power division of the conglomerate specializes in the construction of thermal and nuclear power plants, while the electronics division is responsible for the production of hard drives and semiconductor products.
Toshiba believes that these units could be more accurately assessed if they become separate companies. Investors often underestimate large conglomerates because they are harder to understand from the outside, and also because it is more difficult for a CEO to manage a complex organization than one that has a clearer focus.
Simultaneously with the restructuring, Toshiba said it plans to sell a 60 percent stake in Toshiba Carrier, maker of air-conditioning and commercial ventilation systems, to its joint venture partner Carrier Global Corp. – for about 100 billion yen ($870 million). The Japanese giant is also considering selling Toshiba Elevator and Building Systems Corporation (elevators and other building systems) and Toshiba Lighting & Technology Corporation (lighting products).
In 2021, Toshiba rejected an offer from British investment firm CVC Capital Partners to acquire the Japanese conglomerate. At that time, a deal worth $20 billion was discussed.