Toshiba to be delisted after 74 years, faces future with new owners

Orix

19/12/2023 15:01

By Anton Bridge
       TOKYO, Dec 20 (Reuters) - Toshiba  6502.T  will be
delisted on Wednesday after 74 years on the Tokyo exchange,
following a decade of upheaval and scandal that brought down one
of Japan's biggest brands and ushered in a buyout and an
uncertain future.
    The conglomerate is being taken private by a group of
investors led by private equity firm Japan Industrial
Partners(JIP) that also includes financial services firm Orix
 8591.T , utility Chubu Electric Power  9502.T  and chipmaker
Rohm  6963.T .
    The $14 billion takeover puts Toshiba in domestic hands
after protracted battles with overseas activist investors that
paralysed the maker of batteries, chips, and nuclear and defence
equipment.
    Although it is not clear what shape Toshiba will ultimately
take under its new owners, Chief Executive Taro Shimada, who is
staying in his role following the buyout, is expected to focus
on high-margin digital services. 
    JIP's support for Shimada had derailed its earlier plan to
team up with a state-backed fund. Some industry insiders say
splitting up Toshiba may be a better option.
    "Toshiba's difficulties ultimately were caused by a
combination of bad strategic decisions and bad luck," said
Damian Thong, head of Japan research at Macquarie Capital
Securities. 
    "I hope that through divestitures, Toshiba's assets and
human talent can find new homes where their full potential can
be unleashed."
    Japan's government will be keeping a close watch. The
company employees around 106,000 people and some of its
operations are seen as critical to national security.
    Four JIP executives will join the board, as well as one each
from investors Orix  8591.T  and Chubu Electric  9502.T . The
new management team will be joined by a senior adviser from
Toshiba's main lender, Sumitomo Mitsui Financial Group  8316.T .
    Toshiba has begun moving already, teaming up with investor
Rohm  6963.T  to invest $2.7 billion in manufacturing facilities
to jointly produce power chips.
    The company needs to get out of lower-margin business and
develop stronger commercial strategies for some of its advanced
technologies, said Ulrike Schaede, a professor of Japanese
business at the University of California, San Diego.
    "If management can figure out a way to let those engineers
truly engage in breakthrough innovation activities, they can
emerge as an important player," Schaede said.
    "They're a deep tech company."

 (Reporting by Anton Bridge; Additional reporting by Miho
Uranaka and David Dolan; Editing by Louise Heavens)
 ((Anton.Bridge@thomsonreuters.com;))