Toshiba to be bought by Japan Industrial Partners-led group for $15 billion

Tokyo-based conglomerate Toshiba is set to be bought by a group led by private equity firm Japan Industrial Partners. The Toshiba board accepted the $15 billion buyout offer from the group, as reported by Japanese media. 

If the deal follows through, JIP and its fellow investors, including Orix Group, Rohm Co, and Chubu Electric Power, would acquire one of the most popular companies in Japan. According to Refinitiv data, this would also be the third-largest transaction globally this year. 

The consortium submitted a binding buyout proposal backed by $10.6 billion in loans from major banks. According to a Reuters report, some of the board members were dissatisfied with the offer price, and hence the board had taken weeks to proceed with a vote. 

The process was delayed multiple times as the JIP-led group also faced challenges in acquiring financing as banks became overly cautious in a tumultuous economic environment. 

Toshiba has been embroiled in accounting and corporate governance scandals since 2015, and bore heavy losses, had friction with activist investors that led it to an eventual sale. Its foray into nuclear power business in the US led to a writedown of $6.3 billion, and was forced to sell its memory-chip unit. It was also forced to offer stock that was picked up by foreign investors. 

Stock owners and executives have been at loggerheads over the company’s future due to its disastrous eight years since 2015. Last year a proposal by the management to split the company in two was rejected by stockholders. The split was seen as an alternative to selling the company to a private equity, something that was favoured by the investors. 

As the plan failed, the company looked for strategic options for Toshiba’s future. Eventually, JIP was selected as the preferred bidder in October.

(With agency inputs)

Also read: Hiroshi Furuta appointed as the Chairman, MD of Toshiba T&D