Toshiba splits into 2 companies after major shareholder rebound

Toshiba, which has announced an overhaul after a corporate governance scandal, originally planned to split its business into three companies with businesses in infrastructure, hardware equipment, and semiconductor memory.

According to Toshiba officials, Toshiba/ Infrastructure Service Co. includes Toshiba’s energy systems and solutions, infrastructure systems and solutions, digital solutions and battery businesses, as well as its stake in CAYIN (Kioxia) Co. The Device Co. business includes Toshiba’s electronic components and storage solutions, including power semiconductors, optical semiconductors, analog integrated circuits, high-capacity hard drives for data centers, semiconductor manufacturing equipment, and more.

Toshiba has designated Toshiba TEC Corporation, its publicly traded electronic equipment business, as a non-core asset, and has not yet specified whether it will be sold. If the spin-off plan is implemented smoothly, it is expected to return 300 billion yen in stock dividends to shareholders over the next two years.

CAYIN, the world’s 2nd largest NAND flash memory manufacturer, continues to be partially owned by Toshiba and is seeking to convert CAYIN’s shares to cash as soon as possible to bring more value to shareholders. In fact, CAYIN has been seeking an IPO and has been reported in the past to be in merger talks with storage major WD (Western Digital).

Justin Tang, head of Asian research at financial services firm United First Partners, told Bloomberg that the new plan is more logical given the overlap between semiconductors and equipment, and that the proposal offers more synergy than before.

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