Toshiba Corp (TYO:6502) announced on Friday it plans to split into three standalone companies, one of which will house its activities related to renewable energy and battery storage.
Specifically, the Japanese diversified group intends to separate into Infrastructure Service Co, Device Co and Toshiba. The first of the two new companies will consist of Toshiba’s Energy Systems & Solutions, Infrastructure Systems & Solutions, Building Solutions, Digital Solutions and Battery businesses.
At the same time, Device Co will hold the Electronic Devices & Storage Solutions business, while the current Toshiba will end up with the ownership interests in Kioxia Holdings Corporation (KHC) and Toshiba Tec Corporation (TYO:6588).
The firm that will be known as Infrastructure Service Co will offer products and services related to power generation, transmission and distribution, renewable energy, energy management, systems solutions for public infrastructure, railways and industry, building energy-saving solutions, and IT solutions for government agencies and private companies. It is expected to have net sales of JPY 2.09 trillion (USD 18.3bn/EUR 16bn) in fiscal 2021, possibly growing to JPY 2.23 trillion by fiscal 2023.
Toshiba explained that this separation will allow each business to boost its focus significantly, while also adopting a leaner cost structure. The move needs to be cleared by the company’s shareholders and is seen to be finalised in the second half of fiscal 2023.
This is the first-ever spin-off scheme for a Japanese company of this size, the announcement says.
(JPY 100 = USD 0.877/EUR 0.767)
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