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Toshiba Set to Delist on Dec. 20 as Shareholders Greenlight Privatization Led by Japan Industrial Partners

Toshiba shareholders approve privatization, ending 74-year listing, in consortium-led buyout; industrial shift with key players
Japan
t 6502.TSE Blue Chip 150
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Toshiba is poised to delist on December 20 following shareholder approval for a transformative move toward privatization. The decision, marking the conclusion of Toshiba’s 74-year listing, stems from a consortium led by Japan Industrial Partners (JIP). This development signals the departure of activist investors who previously clashed with the Japanese blue chip’s management over strategic directions.

The consortium, comprising over 20 companies, is positioned to collaborate with the new Toshiba, particularly in the semiconductor sector and beyond. Toshiba’s President and CEO, Taro Shimada, outlined the vision for the company’s reform under a stable shareholder structure, emphasizing a focus on technology.

With an investment of approximately 2 trillion yen ($13.4 billion) to take Toshiba private, just under half of this sum comes from the consortium’s 20-plus companies. Notable contributors include Rohm, known for its cutting-edge silicon carbide power semiconductor devices, and Suzuki Motor, which seeks a stable supply of automotive batteries from Toshiba.

Critical to the success of these collaborations is the joint development of technology and sourcing of materials. However, uncertainties linger, raising questions about the feasibility of sharing crucial technology. As part of the deal, Chubu Electric Power, a Nagoya-area utility, contributed 100 billion yen to explore new business opportunities tapping into Toshiba’s expertise.

Five major Japanese banks, including Sumitomo Mitsui Banking Corp. and Mizuho Bank, are providing a total of 1.4 trillion yen in financing for the deal. Over half of the buyout is funded through lending, putting the onus on Toshiba to boost profits for timely repayment. The consortium, led by JIP, aims to relist Toshiba within approximately five years, requiring a restoration of investor trust after years of management turmoil and a focus on balancing debt repayment with investments in new businesses.

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