Toshiba, one of Japan’s oldest and biggest firms, has announced that it will end its 74-year stock market history as a group of investors have bought a majority stake in the company. The company said that a consortium led by private equity firm Japan Industrial Partners (JIP) has purchased 78.65% of its shares, which allows the group to complete a $14bn deal to take the company private. Under the deal, Toshiba’s shares could be taken off the stock market as early as the end of this year.
Toshiba’s roots date back to 1875, as a maker of clocks and mechanical dolls. Its divisions range from home electronics to nuclear power stations, and for decades after World War Two (WW2) it was a symbol of the country’s economic recovery and its high technology industry.
However, Toshiba has faced a number of major setbacks in recent years. In 2015, it admitted to overstating its profits by more than a $1bn over six years and paid a 7.37bn yen ($47m; £38m) fine, which was the biggest in the country’s history at the time. Two years later, it revealed major losses at its US nuclear power business, taking a 700bn yen writedown. To avoid bankruptcy, it sold its memory chip business in 2018, which was seen as a crown jewel in the company’s portfolio.
Since then, Toshiba has received several takeover offers, including one from UK private equity group CVC Capital Partners in 2021, which it rejected. In the same year, the company was found to have colluded with the Japanese government to suppress the interests of foreign investors. Toshiba then announced plans to break up the company into three separate businesses. Within months, the plan was revised, with its board saying it would instead split the company into two units.
Before the new breakup plan was carried out, the company’s board said it was considering JIP’s offer to take the company private. JIP is known for buying struggling businesses and turning them around. It previously acquired Sony’s Vaio laptop unit and Hitachi’s LCD panel business. JIP said it plans to focus on Toshiba’s core businesses such as infrastructure and energy, and divest non-core assets such as personal computers and home appliances.
Some analysts have expressed concerns that taking Toshiba private could reduce its transparency and accountability, and weaken its corporate governance. Others have argued that going private could help Toshiba streamline its operations and improve its profitability. The deal is subject to approval by Toshiba’s shareholders and regulators.