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Stock Markets
7 Feb 2022
Toshiba Set to Split into Two Companies instead of Three
The Index Today
Toshiba Corp. announced that the conglomerate is set to break into two firms in lieu of three following intense opposition from its shareholders.
The tech giant stated that splitting its operations into two firms instead of the previously-proposed three companies can help it cut costs and ensure seamlessness. The company has listed Toshiba Tec Corp. as a non-core business, while utilizing the remaining $2.6 billion capital for shareholder returns over two years.
Toshiba was able to recoup some of its earlier losses by 4.5% after announcing its plans, with Toshiba Tec’s shares soaring by a marked 15%, which is the highest since 2016. This comes amid several managerial and operational flaws in the company’s functions which set Toshiba back in recent times.
Justin Tang, United First Partners’ Head of Asian Research, contends that the new proposed strategy is “more logical given the overlap in semis and devices”.
