Toshiba Planning a Spin-Off into Two Units

Japan based conglomerate engaging in diversified products and services Toshiba Corp. (TYO: 6502) is planning a spin-off to breakup the company into two units instead of three as efforts to boost shareholders’ returns and to try and appease the angry investors.

According to the new restructuring, Toshiba will separate its devices businesses which comprises of its power chip unit. Previously, the company was aiming at splitting into three units; one for infrastructure, one for flash memory chips and another for devices.

The company is also seeking to scale up shareholders’’ return to $2.6 billion (300 billion yen) over the next two years which is on the higher end compared to an earlier target for returns of 100 billion yen.

The company believes the new restructuring plan is a simpler one which will save costs and make it easier for the company to pursue strategic partnership and forge alliances.

The CEO of Toshiba, Satoshi Tsunakawa, says the new structuring will be put on a shareholder vote at an extraordinary general meeting next month setting the approval threshold at any figure above 51%.

We have not changed the plan to avoid confrontation with shareholders,” added the CEO.

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