On Friday, Toshiba Corp announced plans to split into three companies, as a part of an effort to appease the activist shareholders who have been calling for a radical overhaul of the Japanese conglomerate following years of burdening the company under shadow of scandals.
Toshiba’s breakup is a rare move in Japan, a country that is dominated by conglomerates, coming the same week that General Electric called time on its sprawling empire and Johnson & Johnson announced its own splitting up too.
Toshiba, which was founded in 1875, plans to merge its energy and infrastructure divisions into a single company, while its businesses of hard disc drive and power semiconductor will form the foundation of another. A third will be in charge of Toshiba’s stake in Kioxia Holdings, a flash memory chip company, as well as other investments.
The plan, which is the result of a five-month strategic review launched in the aftermath of a highly damaging corporate governance scandal, is partly intended to encourage activist shareholders to sell their stakes, according to sources familiar with the situation.
The restructuring was announced after Japanese markets had closed, but the company’s Frankfurt-listed shares fell 4 percent on Friday, highlighting investor dissatisfaction. the shares recovered slightly, later, in a very low volume.
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