Toshiba announces successful privatization of $15.3 billion acquisition
Toshiba, amidst a period of restructuring, has announced that a $15.3 billion acquisition offer, led by the Japan Industrial Partners (JIP) consortium of domestic enterprises, has been successfully accepted. This has garnered the participation of over half its shareholders, meeting the threshold for the company’s privatization. Presently, JIP holds a substantial 78.65% stake in Toshiba. Upon the deal’s completion, Toshiba will delist from the Tokyo Stock Exchange, thus concluding a 74-year tenure in the public domain.
Over the past decade, Toshiba’s prominence has dwindled from its once-lustrous status as a tech titan, marred by various challenges. These include losing its edge in the semiconductor business, facing fierce competition from rising Chinese brands in the home appliances sector, and unsuccessful strategic investments in nuclear power. The 2015 revelation of Toshiba’s financial discrepancies, implicating three of its presidents and inflating profits by nearly $1.2 billion over five years, sent its stock prices plummeting, eroding its market value by 40%. Following this debacle, Toshiba embarked on divestiture pursuits, selling its home appliances division to Midea, PC business to Sharp, and a significant portion of its storage business to a consortium led by Bain Capital.
In 2021, in an effort to alleviate internal tensions and disputes with overseas shareholders, Toshiba’s leadership proposed a strategic overhaul, suggesting a trifurcation of the Toshiba Group into three independent entities. Met with skepticism, the plan faced considerable resistance, leading to a revised proposal in 2022 to bifurcate, separating its semiconductor-inclusive devices business. Additionally, there were considerations to divest non-core assets. However, this proposal too faced setbacks, with over half of its shareholders dissenting.
By March of this year, Toshiba had accepted the acquisition proposal fronted by JIP. Based on Toshiba’s market valuation at that juncture, the tender offer amounted to approximately $15.3 billion. Comprising 17 Japanese enterprises, including Orix, Chubu Electric Power, and Rohm Semiconductor, JIP’s bid was bolstered financially by a consortium of six Japanese banks, including Sumitomo Mitsui Banking Corporation, ensuring ample funding for the acquisition.