Toshiba to be Sold to Japanese Industrial Partners for €14 Billion
Technology company Toshiba has been sold to Japanese Industrial Partners (JIP) for around €14 billion (two trillion yen), according to a report by Japanese newspaper Nikkei. The board of directors, made up of 12 members, decided on the takeover by the Japanese venture capital company on Thursday. JIP consists of 20 Japanese companies, including energy firm Chubu Denryoku and chip manufacturer Rohm. The purchase of Toshiba is intended to privatize the company and remove it from the Tokyo stock exchange.
One of the last three hard drive manufacturers, Toshiba had already sold shares in its former SSD division, known as Kioxia, to an American consortium in 2019. CEO Nobuaki Kurumatani had said in an interview with the Financial Times in June 2020 that he would be willing to sell the company as long as the deal “makes the company great again.”
Controversies Surrounding Toshiba
Toshiba faced a controversy in 2015 when incorrect accounting was uncovered, causing a financial crisis. In 2019, the then vice president resigned for not following company rules regarding business expenses. Toshiba also faced conflicts with foreign shareholders who disagreed with the company’s course and tried to collude with the Japanese Ministry of Commerce against them.
The sale of Toshiba is aimed at excluding foreign shareholders, known as “activists,” however, some see it as a symptom of the company’s financial condition. In February, Toshiba reported a 90% drop in profits, and hardware sales collapsed where it sold around 39% fewer hard drives compared to the previous year.
Toshiba’s decision to withdraw from the stock market comes at a time of global recession. The sale to JIP could offer the company more freedom under new management.