Scandal-hit Toshiba to split into three companies

Three Toshiba signs displayed under an overpass in Kuala Lumpur

Japanese giant Toshiba has outlined plans to break up its business into three independent companies in a bid to add more value for its shareholders.

The company will spin-off its energy and infrastructure units under the new brand Infrastructure Co, while hardware and storage services will fall under Device Co.

All remaining units, and its 40.6% stake in memory chipmaker Kioxia, will be handled under the original Toshiba brand, with the spin-offs set to be completed by the second half of 2023. The firm is also said to be interested in "monetising" its shares in Kioxia, so that it can return the net proceeds in full to shareholders as soon as possible.

The spin-off plans are the result of a strategic, investor-commissioned review into the management of the Japanese conglomerate, following a number of scandals. In June, an independent investigation found that Toshiba's management "colluded" with Japan's Ministry of Economy, Trade, and Industry, to put pressure on activist shareholders at the company's AGM meeting in 2020.

Toshiba was once a global giant for electronics, but the last decade has proven turbulent for the company.

In 2015 it was revealed that the firm had been over valuating its profits by $1.3 billion for almost seven years, resulting in a $60 million penalty from Japan's Securities and Exchange Surveillance Commission for accounting fraud.


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Most recently, the 140-year-old firm sold off its laptop business to Sharp, which consisted of a 19.9% stake in Dynabook. Sharp had also already bought an 80.1% stake in Toshiba's PC business just two years earlier.

According to Toshiba's president and CEO, Satoshi Tsunakawa, the company has "constantly evolved to stay ahead of the times" and this current spin-off is "no different".

"In order to enhance our competitive positioning, each business now needs greater flexibility to address its own market opportunities and challenges," Tsunakawa said in a statement. "We are convinced that the business separation is attractive and compelling: it will unlock immense value by removing complexity, it enables the businesses to have much more focused management, facilitating agile decision making, and the separation naturally enhances choices for shareholders.

"Our Board and management team firmly believe that this strategic reorganisation is the right step for sustainable profitable growth of each business and the best path to create additional value for our stakeholders. We are grateful for the Strategic Review Committee's thorough evaluation and recommendation on our best path forward."

Each new company will be listed publicly and will have their own separate board of directors and management.

Bobby Hellard

Bobby Hellard is ITPro's Reviews Editor and has worked on CloudPro and ChannelPro since 2018. In his time at ITPro, Bobby has covered stories for all the major technology companies, such as Apple, Microsoft, Amazon and Facebook, and regularly attends industry-leading events such as AWS Re:Invent and Google Cloud Next.

Bobby mainly covers hardware reviews, but you will also recognize him as the face of many of our video reviews of laptops and smartphones.