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TOKYO (AP) — Embattled Japanese technology conglomerate Toshiba said Friday it is restructuring to improve its competitiveness, spinning off its energy infrastructure and computer devices businesses.
The energy infrastructure spinoff will include Tokyo-based Toshiba’ Corp.’s nuclear power operations, including the decommissioning efforts at the nuclear plant in Fukushima that suffered meltdowns after an earthquake and tsunami in March 2011.
The energy business will also include the company’s sustainable energy and battery businesses. Its annual sales total about ¥2 trillion ($18 billion).
The other spinoff and stand-alone company encompasses Toshiba’s computer devices and storage operations, with annual sales of ¥870 billion.
Toshiba will remain a third independent company, holding what’s left, such as its flash memory company Kioxia Holdings Corp. and Toshiba Tec Corp., which makes office equipment.
Such a major restructuring is unusual for a big Japanese company. But Toshiba is not alone in deciding that a sprawling conglomerate may not be the best fit for the times.
Earlier this week, General Electric announced it was dividing itself into three public companies, focused on aviation, health care and energy. Like Toshiba, GE struggled under its own weight and decided to streamline its main business after a long review.
Toshiba said its restructuring would be completed by March 2024. Separating the financial results of the companies will start from this fiscal year, it said.
Chief Executive Satoshi Tsunakawa said the two kinds of businesses being spun off were very different, with the business cycle for devices much faster than that for infrastructure, and the device business requiring heavy investments.
“It will unlock immense value by removing complexity, it enables the businesses to have much more focused management, facilitating agile decision making, and the separation naturally enhances choices for shareholders,” Tsunakawa said of the new structure.
