The reorganisation plan, unanimously approved by Toshiba’s board, follows a review of a wide range of strategic options by the board’s Strategic Review Committee

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An office of Toshiba in Canada. (Credit: Raysonho @ Open Grid Scheduler / Grid Engine / Wikipedia.org)

Japanese conglomerate Toshiba has unveiled plans to split into three standalone companies to improve shareholder value.

The new entities will include Infrastructure Service Co., which consists of Toshiba’s Energy Systems & Solutions, Infrastructure Systems & Solutions, Building Solutions, Digital Solutions and Battery businesses; Device Co., which comprises Toshiba’s Electronic Devices & Storage Solutions business; and Toshiba, which holds its interest in Kioxia Holdings Corporation and Toshiba Tec Corporation.

Infrastructure Service Co.’s products and services include power generation, transmission and distribution, energy management, renewable energy, systems solutions for public infrastructure, railways and industry, building energy-saving solutions, and IT solutions for government agencies and private firms.

Device Co.’s products include power semiconductors (silicon, compounds), optical semiconductors, analogue integrated circuits, high-capacity hard disk drives (HDD) for data centres, and semiconductor manufacturing equipment.

Toshiba interim chairperson, president and CEO Satoshi Tsunakawa said: “Over our more than 140-year history, Toshiba has constantly evolved to stay ahead of the times. Today’s announcement is no different. In order to enhance our competitive positioning, each business now needs greater flexibility to address its own market opportunities and challenges.

“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.”

The reorganisation plan has been unanimously approved by Toshiba’s board following a review of a wide range of strategic options by the board’s Strategic Review Committee (SRC).

The split, subject to the completion of necessary procedures, is anticipated to complete in the second half of the fiscal year 2023.

Post-split, each company is expected to increase its focus and facilitate more agile decision-making and leaner cost structures.

Tsunakawa further added: “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.”