Historic Shift: Toshiba to Exit Stock Market after 74 Years


Tokyo, Japan -Toshiba, a cornerstone of Japan's corporate landscape for over a century, is poised to conclude its 74-year tenure on the stock market, as a consortium of investors has acquired a controlling stake.

In an official announcement, Toshiba revealed that a consortium spearheaded by private equity titan Japan Industrial Partners (JIP) has procured a significant 78.65% of the company's shares.

This acquisition, exceeding the two-thirds threshold, positions the group to finalize a monumental $14 billion (£11.4 billion) deal for the company's privatization.

With roots tracing back to 1875 as a telegraph equipment manufacturer, the company could potentially exit the stock market by year-end under the terms of the agreement.

Taro Shimada, President and CEO of Toshiba, expressed, "The company will now take a major step toward a new future with a new shareholder."

Toshiba's shares first entered the market in May 1949, marking a pivotal moment as Japan emerged from the aftermath of World War Two (WW2).

The conglomerate's interests span from household electronics to nuclear power facilities, embodying Japan's post-WW2 economic resurgence and technological prowess.

In 1985, Toshiba unveiled what it touted as "the world's first mass-market laptop computer."

Yet, in recent years, the Tokyo-based corporation encountered significant challenges.

Gerhard Fasol, CEO of business advisory firm Eurotechnology Japan, contended, "Toshiba's catastrophe is a consequence of inadequate corporate governance at the top."

In 2015, it confessed to inflating profits by over $1 billion across six years, incurring a record 7.37 billion yen ($47 million; £38 million) fine at that time.

Subsequently, it unveiled substantial losses in its US nuclear power subsidiary, Westinghouse, resulting in a 700 billion yen writedown.

To avert insolvency, Toshiba divested its prized memory chip division in 2018.

Since then, Toshiba has entertained various acquisition offers, including a proposition from UK private equity entity CVC Capital Partners in 2021, which it rebuffed.

During the same period, it was discovered that the company collaborated with the Japanese government to suppress the interests of foreign investors.

"Toshiba, in the eyes of many Japanese people and especially government, is a national treasure, which is part of the problem," remarked Mr. Fasol.

Subsequently, the company disclosed intentions to partition into three distinct entities. Shortly after, the plan was revised, with the board opting for a bifurcation into two units.

Before executing the latest restructuring plan, the board mulled over JIP's offer to take the company private.

"The company needs to radically reinvent itself after spinning off many of its core business units, notably its semiconductor group," emphasized Marc Einstein, Chief Analyst at Tokyo-based research and advisory firm ITR Corporation.

Einstein further noted that Toshiba's move to go private aligns with a broader trend among Japanese firms seeking to evade heightened shareholder accountability.

As Toshiba prepares to transition into private ownership, this historic move marks a turning point for one of Japan's most venerable industrial stalwarts.

*Note: This article is based on the information available as of September 2023.*