Considered by its magnitude as a precedent in Japan, the proposed acquisition of industry giant Toshiba by the American investment fund Bain Capital is becoming clearer. In an interview Tuesday, April 19 given to the economic daily Nihon Keizai, Yuji Sugimoto, in charge of Asian operations at Bain Capital, wanted to be reassuring, aware of the distrust of the Japanese business world towards foreign funds. He announced that“initially, there would be no dismantling of the group. We will keep Toshiba’s business together and refrain from any divestiture.”
Mentioned for several weeks and seeming reinforced by the creation, on April 6, by Toshiba of a commission before “identify the best offer for the parties concerned”the project would represent a new upheaval for the conglomerate whose origins date back to the end of the 19and century with the creation, in Tokyo, of a production activity for telegraph and electrical equipment.
After the Second World War, Toshiba experienced strong growth, establishing itself as an industrial giant, from electronics to nuclear. The company now has nearly 190,000 employees and expects sales to increase by 9.2% to 3,340 billion yen (24.1 billion euros) and operating revenues to increase by 48.5% to 155 billion yen (1.1 billion euros) at the end of the financial year ended at the end of March.
Accounting and industrial imbroglio
These good results hardly mask the difficulties accumulated since the revelations, in 2015, of falsification of balance sheets for seven years, which forced it to major restructuring. In 2017, an accounting and industrial imbroglio in its nuclear activity in the United States, a consequence of its takeover of Westinghouse in 2006, had brought it to the brink of bankruptcy. To avoid this, the group had issued 600 billion yen (4.3 billion euros) in new shares. Activist investors entered its capital and have since weighed on its strategy.
This pressure adds to management’s difficulties in defining a convincing medium- and long-term strategy. In March, shareholders rejected a plan formulated in November 2021 to split the group into three entities to give more flexibility to the decision-making process. Reviled by some of the shareholders as soon as it was announced, the project underwent several revisions which did not prevent its rejection. Its holders, the general manager, Satoshi Tsunakawa, and the vice-president, Mamoru Hatazawa, had resigned shortly before the vote of the shareholders.
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