Toshiba to split into three companies to strengthen each company's focus areas such as carbon neutrality and IT infrastructure development, and promote agile decision-making.

Toshiba Corporation announced plans on the 12th to split itself into three independent companies.

The three companies being spun off are Infrastructure Service Co., Device Co., and Toshiba.

Infrastructure Service Co. consists of Toshiba's Energy Systems & Solutions, Infrastructure Systems & Solutions, Building Solutions, Digital Solutions and Battery businesses.

Device Co. consists of Toshiba's electronic devices and storage solutions businesses.

Toshiba holds shares in Kioxia Holdings Corporation (KHC) and Toshiba Tec Corporation.

This corporate split will create two companies with distinct business characteristics that will lead their respective industries: achieving carbon neutrality and infrastructure resilience (infrastructure services) and supporting the development of social and IT infrastructure (devices).

The spin-off will allow each company to significantly strengthen its focus areas, facilitate more agile decision-making and optimize its cost structure.

The two companies leverage their distinct market positions, priorities and growth drivers toThis will put the company in a much better position to deliver sustainable earnings growth and shareholder value enhancement.

In addition, Toshiba plans to cash out its Kioxia stake and return all net proceeds to shareholders as quickly as possible while maximizing shareholder value without impeding the smooth implementation of the planned spin-off.

Satoshi Tsunakawa, interim chairman, president and CEO of Toshiba, said, “Over its 140-year history, Toshiba has consistently evolved and stayed ahead of its time, and today’s announcement is no different. In order for each business to gain competitive advantage, it is now necessary to enhance the flexibility to address its own market opportunities and challenges. We believe that separation of the businesses is attractive and compelling. It creates tremendous value by eliminating complexity, while facilitating agile decision-making and naturally enhancing shareholder choice through separation, allowing us to manage the company more effectively. The board and management firmly believe that this strategic realignment is the right course of action for the sustainable and profitable growth of each business, and the best path to create added value for stakeholders. I would like to thank the Strategy Review Committee for their thorough evaluation and recommendation of the best course of action.”

The reorganization is expected to be completed in the second half of 2023, subject to necessary procedures including approval by Toshiba's general shareholders' meeting and satisfaction of all review requirements by relevant authorities.