Japan's esteemed technology conglomerate, Toshiba, is set to conclude its 74-year history on the stock market as a consortium of investors acquires a majority stake, BBC reported. The company has announced that a consortium led by private equity firm Japan Industrial Partners (JIP) has successfully acquired 78.65% of its shares. This ownership stake surpasses the two-thirds threshold required to proceed with a monumental $14bn (£11.4bn) deal to take the company private.
Toshiba, which has its origins dating back to 1875 as a manufacturer of telegraph equipment, will potentially have its shares delisted from the stock market by the end of the current year. This transformative move signifies a significant shift for the company, marking a historic juncture in its evolution.
Taro Shimada, President and CEO of Toshiba, expressed the company's perspective on this momentous development, stating,
"The company will now take a major step toward a new future with a new shareholder."
Toshiba's shares commenced trading in May 1949 when the Tokyo Stock Exchange reopened following Japan's emergence from the aftermath of World War II. Throughout its history, Toshiba has been synonymous with technological innovation, with divisions spanning from home electronics to nuclear power stations.
Notably, in 1985, Toshiba introduced what it described as "the world's first mass-market laptop computer," contributing to its reputation as a pioneering technology company.
However, Toshiba has encountered a series of substantial setbacks in recent years, culminating in this decision to go private. According to Gerhard Fasol, CEO of business advisory firm Eurotechnology Japan,
"Toshiba's catastrophe is a consequence of inadequate corporate governance at the top."
One of the significant crises faced by Toshiba was in 2015 when the company admitted to overstating its profits by over $1bn over a six-year period, resulting in a hefty 7.37bn yen ($47mn; £38mn) fine, which was the largest in the country's history at the time.
Two years later, Toshiba revealed massive losses in its US nuclear power subsidiary, Westinghouse, necessitating a colossal 700bn yen writedown. To prevent bankruptcy, Toshiba decided to sell its memory chip business in 2018, which was regarded as a crown jewel in the company's portfolio.
Toshiba subsequently received several takeover offers, including one from UK private equity group CVC Capital Partners in 2021, all of which were rebuffed.
In the same year, it was revealed that Toshiba had engaged in collusion with the Japanese government to suppress the interests of foreign investors, adding to the company's woes.
Toshiba initially announced plans to break up the company into three separate businesses; however, this plan was subsequently revised by its board, which instead proposed splitting the company into two units.
Marc Einstein, Chief Analyst at Tokyo-based research and advisory firm ITR Corporation, highlighted the need for Toshiba to reinvent itself after shedding many core business units, particularly its semiconductor group.
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