Androniki Christodoulou – Reuters
Toshiba Building in Kawasaki, Japan.
Tokyo
Reuters
—
Toshiba said Thursday that a $14 billion bid from private equity firm Japan Industrial Partners (JIP) has concluded successfully — a deal that paves the way for the struggling industrial conglomerate to go private.
The JIP-led consortium saw 78.65% of Toshiba shares floated, giving the group a majority of more than two-thirds which would be enough to put pressure on remaining shareholders.
The deal puts the 148-year-old maker of electronics-to-power conversion plants into local hands after years of battles with activist investors abroad. Toshiba is scheduled to be delisted as early as December.
“Activist shareholders and Toshiba have been stuck with each other for years. This acquisition allows both sides to escape mutual pain,” said analyst Travis Lundy of Quiddity Advisors, who publishes at Smartkarma.
Toshiba in March accepted a takeover offer that valued the industrial group at 2 trillion yen ($13.5 billion). Although some shareholders were not satisfied with the price, Toshiba said there was no possibility of a higher or competing offer.
“We are very grateful to our many shareholders for understanding the company’s position,” Toshiba CEO Taro Shimada said in a statement Thursday.
He added that Toshiba “will now take a big step towards a new future with a new shareholder.”
Toshiba said its complex relationships with various stakeholders, including shareholders with different views, have hampered business operations and that a stable shareholder base will help the company pursue its long-term strategy focused on high-margin digital services.
JIP plans to retain CEO Shimada.
“I expect the prospect of new management and ownership alignment to improve morale. However, to succeed, management must be able to tell a better story to investors coming out of this situation.”
Although not well known abroad, JIP has been involved in corporate carve-outs and spin-offs from Japanese conglomerates, including Olympus’ camera business and Sony Group’s laptop business.
Since 2015, Toshiba has been hit by accounting scandals, suffered huge losses and came close to being delisted. It has also been implicated in a series of corporate governance scandals.
The JIP consortium includes 20 Japanese companies, led by chip maker Rohm, financial services company Orix, and Chubu Electric Power.
This will be the largest M&A deal in Japan this year. Japan was the only major market in Asia to see growth in mergers and acquisitions this year so far, according to LSEG data.
Deals involving private equity have been particularly active, including the planned $6.4 billion acquisition of materials maker JSR by a government-backed fund.
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