Japanese giant Toshiba announces breakup plan

Japan: The great Toshiba company has confirmed plans to split the franchise up into three separate businesses.

Toshiba stated that the three companies would be focused separately upon infrastructure, semiconductors and devices. The company made the decision in response to the increasing pressure it has faced from activist investors in order to make changes since an accounting scandal occured in 2015.

This week, US giant General Electric had announced a similar strategy that will see the historic company broken up into separate businesses.

Toshiba’s plan includes working on two core businesses , its energy and infrastructure unit as well as its device and storage operation.

After breaking apart these two companies, Toshiba will continue to own a 40.6% stake in memory chipmaker Kioxia as well as other assets. It expects to complete the reorganization by the second half of 2023.

This act aims to increase the stock market valuations of Toshiba’s different businesses after facing pressure from shareholders. But some analysts have expressed their concern about the timescale for the changes.

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