Toshiba Splits Into Three Separate Companies For More Flexible Management


Japan’s Toshiba Group officially announced today that it will split into three independent companies:

Infrastructure Service Co. – The company’s main business is infrastructure services. They will include previous performance systems and solutions, infrastructure systems and solutions, construction solutions, digital solutions, and battery business.

Device Co. – The company includes Toshiba’s electronic equipment and storage solutions business.

Toshiba – It will continue to hold shares in Kioxia and Toshiba Tec Corporation.

Also Read: Toshiba Completely Withdraws From The Notebook Market

Why Toshiba Splits Into Three?

The company spokesperson said that after Toshiba’s split, it will make its business more flexible. Moreover, this should enable each company to make more precise decisions in the aforementioned fields and reduce operating costs. In addition, Toshiba intends to monetize Kioxia’s stock to maximize shareholder value and return the net profit to shareholders in full as soon as possible without affecting the implementation of the split.


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“In order to enhance our competitive positioning, each business now needs greater flexibility to address its own market opportunities and challenges,” Toshiba interim chair, president, and CEO Satoshi Tsunakawa said.

The split plan has been unanimously approved by Toshiba’s board of directors. The Strategic Review Committee of the Board of Directors, SRC, is composed of 5 independent outside directors. They review a wide range of strategic options. During the review, SRC solicited shareholder opinions on the company’s strategic direction and discussed with multiple potential partners. It took nearly five months of review. And now, Toshiba’s management team and board of directors believe that this is the best solution at the moment. Splitting into three independent companies is the best way to increase shareholder value.

“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 reorganization is the right step for sustainable profitable growth of each business and the best path to create additional value for our stakeholders.”

This Should Solve A Few Issues

Toshiba expects that the revenue of the infrastructure business will reach 2.09 trillion yen ($0.018 trillion) in the 2021 fiscal year; the revenue of the equipment company will reach 870 billion yen ($7.64 trillion). In addition, Toshiba also plans to return 100 billion yen (approximately $875 million) to shareholders in the next two years.

“Separation of the leadership structures for these businesses will facilitate more agile decision-making, with greater focus and knowledge of the company’s customers and employees, and create optionality for both new companies to make their own separate and informed decisions regarding potential strategic partners.”

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