Toshiba (OTC:TOSYY) Corp., the Tokyo-based multinational conglomerate, has said that over half of its shareholders have endorsed a $15 billion buyout led by Japan Industrial Partners Inc. The approval of this buyout crosses the requisite threshold to privatize the company, thereby concluding its 74-year tenure as a publicly listed entity.
Japan Industrial Partners now holds a stake of 78.65% in Toshiba, marking the end of a turbulent decade for the electronics firm characterized by scandals and substantial financial losses. A date for delisting from the Tokyo Stock Exchange will be declared in due course.
The decision to privatize followed a prolonged auction process that left Toshiba in a state of uncertainty during a year marked by significant industry shifts, particularly the growing interest in artificial intelligence. Meanwhile, Toshiba's semiconductor subsidiary, Kioxia Holdings Corp., found it challenging to compete with industry leaders like Samsung (LON:0593xq) Electronics (KS:005930) Co. and SK Hynix Inc. Discussions regarding a potential merger with Western Digital Corp (NASDAQ:WDC).'s flash memory business are still in progress.
Company executives and lenders anticipate that privatization will allow Toshiba to focus on its long-term strategy. The company's diverse portfolio spans nuclear power plants, refrigerators, and hard-disk drives. However, Toshiba has grappled with leadership instability, including three presidential appointments within three years and the resignation of Chief Operating Officer Goro Yanase earlier this year due to inappropriate entertainment expense claims.
In 2015, Toshiba faced penalties for falsifying financial statements, marking the largest penalty of its kind in Japan's history. This was succeeded by an unfortunate venture into the nuclear business which led to a $6.3 billion writedown and forced Toshiba to sell its prized memory-chip business, now known as Kioxia Holdings Corp.
In response to these challenges, activist investors started targeting the company in 2021, leading Toshiba to announce plans to divide into three separate units. However, this plan was later revised in 2022 to a two-way split, which led to the resignation of the CEO amid the ensuing turmoil and initiated the board's search for bids for privatization.
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