Toshiba Corp, a Japanese industrial conglomerate, announced plans on Friday to split into three independent firms by spinning off two major businesses: energy and infrastructure and device and storage.

Toshiba will retain its 40.6 percent ownership in memory chipmaker Kioxia, as well as other assets, after the two firms are spun off.

According to sources familiar with the situation, the proposal, which resulted from a five-month strategic review following a severely devastating corporate governance incident, is partially geared at enticing activist shareholders to quit.

A split would go against some shareholders’ wishes for the scandal-plagued Toshiba to be taken private, but the company’s strategic review committee said that option had generated internal worries about the impact on business and employee retention.

Private equity firms had also expressed worries about completing a merger owing to a potential clash with Japan’s national security law and probable pushback from anti-trust regulators, according to the report.

Toshiba CEO Satoshi Tsunakawa stated that the company would have chosen to separate regardless of the presence of activist shareholders, and that Japan’s powerful trade ministry had not objected to the idea.

“The decision allows each business to significantly increase its focus and facilitate more agile decision-making and leaner cost structures,” the company said in a statement.

Toshiba’s statement comes only days after General Electric Co announced plans to split into three companies, thereby ending another pioneering conglomerate with over 100 years of history.


Toshiba expects to complete the reorganisation by the second half of the fiscal year 2023 and to return approximately 100 billion yen ($875 million) to shareholders over the next two fiscal years.

It also stated that it intended to “monetize” its Kioxia shares, returning the net revenues to stockholders as quickly as possible. However, it did not specify whether this meant that it was still interested in an IPO or that it was examining alternative possibilities.

Toshiba will also retain its investment in Toshiba Tec Corp, a manufacturer of printing and retail information systems.