Toshiba Delisted After 74 Years: Enters New Era Under Domestic Ownership

A consortium of investors, led by the private equity firm Japan Industrial Partners (JIP), has orchestrated a $14 billion takeover of Toshiba.

After 74 years of trading on the Tokyo exchange, Toshiba (6502.T) was officially delisted on Wednesday, marking the end of an era for one of Japan’s iconic brands.

The company’s removal from the public stock market comes after a tumultuous decade marked by upheaval and scandal, which ultimately led to the downfall of the once-mighty conglomerate.

Toshiba’s future is now uncertain as it embarks on a new phase of ownership.

A consortium of investors, led by the private equity firm Japan Industrial Partners (JIP), has orchestrated a $14 billion takeover of Toshiba.

This consortium also includes financial services firm Orix (8591.T), utility company Chubu Electric Power (9502.T), and chipmaker Rohm (6963.T).

This move takes Toshiba out of the hands of overseas activist investors who had paralyzed the company with disputes, enabling it to refocus its efforts.

Toshiba, in a statement, expressed its commitment to forging a new path with its new shareholders and requested ongoing support from its stakeholders.

The company’s shares closed at 4,590 yen on its last trading day, showing a minimal decrease of 0.1%.

While the exact direction Toshiba will take under its new ownership remains unclear, Chief Executive Taro Shimada, who is retaining his position after the buyout, is expected to emphasize high-margin digital services.

JIP’s backing of Shimada’s leadership thwarted the earlier plan to collaborate with a state-backed fund. Some industry experts suggest that splitting up Toshiba’s various businesses may be a more viable option.

Damian Thong, the head of Japan research at Macquarie Capital Securities, attributed Toshiba’s woes to a combination of poor strategic decisions and unfortunate circumstances.

He expressed hope that divestitures would allow Toshiba’s assets and talent to thrive in new homes where their full potential could be realized.

The Japanese government is closely monitoring the situation, given Toshiba’s role as a major employer with approximately 106,000 workers and some operations critical to national security.

The new management team will include four JIP executives, as well as representatives from Orix, Chubu Electric, and Sumitomo Mitsui Financial Group (8316.T), Toshiba’s primary lender.

Toshiba has already taken steps toward its new future by partnering with Rohm to invest $2.7 billion in manufacturing facilities for jointly producing power chips.

To succeed, the company must divest from lower-margin businesses and develop robust commercial strategies for its advanced technologies, according to Ulrike Schaede, a professor of Japanese business at the University of California, San Diego.

She believes that by enabling engineers to engage in breakthrough innovation activities, Toshiba can once again emerge as a significant player in the deep tech industry.