Toshiba, one of Japan’s oldest and largest companies, is set to end its 74-year history on the stock market as a group of investors have acquired a majority stake. The company has announced that a consortium led by private equity firm Japan Industrial Partners (JIP) has purchased 78.65% of its shares, allowing the group to complete a $14 billion deal to take the company private.
Toshiba, with roots dating back to 1875 as a maker of clocks and mechanical dolls, has been a symbol of Japan’s economic recovery and high technology industry for decades. However, the Tokyo-based company has faced significant setbacks in recent years. In 2015, it admitted to overstating its profits by over $1 billion and paid a fine of 7.37 billion yen ($47 million), which was the largest in the country’s history at that time.
To avoid bankruptcy, Toshiba sold its memory chip business in 2018, which was considered a crown jewel in its portfolio. “Toshiba’s catastrophe is a consequence of inadequate corporate governance at the top,” said Gerhard Fasol, CEO of business advisory firm Eurotechnology Japan. He also highlighted that the perception of Toshiba as a national treasure by the Japanese government and people contributed to the problem.
Under the new deal, Toshiba’s shares could be delisted from the stock market as early as the end of this year. The company’s president and CEO, Taro Shimada, expressed that this move signifies a major step towards a new future with a new shareholder.
Toshiba’s journey on the Tokyo Stock Exchange began in May 1949, marking Japan’s emergence from the devastations of World War Two. Its divisions span from home electronics to nuclear power stations, but now the company will navigate a new path under private ownership.
The acquisition of Toshiba by JIP-led consortium marks the end of an era for one of Japan’s iconic companies, while signaling a new chapter in its history.