Toshiba will soon split off its four in-house companies into wholly owned subsidiaries, aiming to further enhance collaboration between the split-off entities and maximising the value of each business with the move.
As of 1 July, its industrial ICT solutions company will be merged into Toshiba Solutions Corporation, responsible for construction work related to the ICT solutions business and holds construction business licenses.
“As the succeeding company holds special construction business licenses, this will maintain continuity in business areas that requires such licenses,” it said in a statement.
“The merger will also allow establishment of a business structure that unifies development, manufacturing and sales of ICT solutions that utilise IoT and AI, increase the scale of solutions business for manufacturing, industry, social infrastructure, distribution and finance, government and municipalities, and support further business growth.”
The new company will also focus heavily on digital transformation by expanding business through its Spinex IOT architecture and providing services.
Its storage and electronics devices solutions company will be transferred into its newly established Toshiba Memory Corporation, created on 1 April. As a result of this, Toshiba is working towards the growth of its other electronics devices business.
This includes discrete semiconductors, system LSIs, HDDs and other related products.
In addition, its infrastructure system and solutions company will be absorbed into Toshiba Electric Service Corporation, which is responsible for part of the installation work, electrical construction, maintenance and inspection services in the social infrastructure business and holds business licenses.
“The new company aims to realise continuous growth for the social infrastructure business by positioning it to continue to promote a spiral lifecycle business offering products, systems, and services that improve customer value,” it said in the statement.
As of 1 October, its energy systems and solutions company and the Nuclear Energy Systems and Solutions division will be combined to form a newly established company.
This new company will focus on obtaining special construction business licenses and offer products, systems and services within the energy sector.
As a result of the company splits, the new companies will become independent business entities, which Toshiba said will clarify their responsibilities to the market and customer, ultimately supporting the “maximisation of [its] business value”.
Toshiba added that it expects to establish an “optimised structure” to ensure business continuity, and that all the splits will have no impact on the company’s consolidated financial results.
Other information, such as the representatives leading the succeeding companies, capital stock, and fiscal terms (excluding Toshiba Solutions Corporation which is set for 31 March) are yet to be determined.
Toshiba has been in the spotlight for the sale of its memory chip business, with ARN reporting recently that the company is attracting more bidders made by a joint US and Japan-backed venture, amongst other bids.
The reorganisation of the business units could be a lead-up to the sale, further streamlining its operations and structures in relation to it.
“The company announced its intentions [to split off and regroup the entities] on respect of eliminating risk related to the overseas power business, which has been realised by the commencement of Chapter 11 proceedings that eliminate Westinginghouse from FY2016 consolidated earnings results,” Toshiba said.
After the splits, Toshiba said it will further concentrate on “maximising its value and strengthening its governance system and risk management structures” to match its diverse business environments.