Japan AG is about to take a big step: On Monday, the first major split of a traditional Japanese company since the Second World War came much closer.
At Toshiba, the paths for some divisions will probably soon divide.
After an uprising by major shareholders, the Toshiba conglomerate announced that it would no longer split the 151-year-old company into three, but only two companies as originally planned, and would also sell many branches of the business. Toshiba will keep the majority of the power plant business, the battery division and the 40 percent stake in the memory chip manufacturer Kioxia. Other semiconductor products and memory solutions, on the other hand, are being spun off and are to be taken public.
Encouraging sign for Japan
For Japan, implementation of the plan would be an encouraging sign. For the first time, shareholder activists would bring the manager clique of a traditional company to its knees. After all, he had ruined the former flagship of Japanese innovation with accounting scandals and the bankruptcy of his American nuclear power plant subsidiary.
And to make it work this time, Toshiba is enticing shareholders with more money in addition to the promise of higher profits. The dividend is to be tripled to the equivalent of CHF 2.4 billion over the next two years.
The real test is yet to come
The answer from the major shareholders is still pending. Toshiba will explain the details of the new strategy to you at an investor conference on Monday and Tuesday. But investors have at least reacted positively to the proposal. While the Nikkei 225 index fell 0.7 percent on Monday, Toshiba’s share price rose 1.6 percent to 4,800 yen (38.60 francs). However, the real test is yet to come. Toshiba now has to show that it can hold its own in the face of global competition.