Toshiba, the Japanese electronics giant, has accepted a takeover offer from a consortium led by private equity firm Japan Industrial Partners (JIP) for around $15 billion, according to reports from Nikkei Asia. The deal, which is expected to be completed in October, will see Toshiba become a private company after more than 140 years as a publicly traded firm.
The move comes after a tumultuous few years for Toshiba, which has struggled with financial problems and governance issues. The company has been hit by massive losses in its nuclear division, which forced it to sell off its profitable memory chip business in 2018. Toshiba has also faced pressure from activist investors, who have been calling for changes to its management and corporate governance practices.
As the iconic conglomerate moved a step closer to ending a troubled chapter in its more-than-140-year history.
Under the terms of the deal, Japan Industrial Partners and other investors will acquire Toshiba’s shares for around 2,300 yen ($20.8) each, a premium of around 15% over the company’s current stock price. The consortium plans to take Toshiba private and focus on its core businesses, including energy and infrastructure, while restructuring its operations to improve profitability.
The buyout offer from JIP was one of several that Toshiba had received in recent months. Other potential buyers included US private equity firm KKR, as well as a group led by Canadian investment fund Brookfield Asset Management. However, Toshiba ultimately decided to go with JIP, which has a track record of turning around struggling Japanese companies.
The Tokyo-based company’s board approved on Thursday the takeover offer about 2 trillion yen ($15.3 billion).
The decision to accept the buyout offer has been met with mixed reactions from investors and analysts. Some have praised the move as a necessary step for Toshiba to address its financial problems and focus on its core businesses. Others, however, have raised concerns about the impact of the buyout on Toshiba’s employees and on the Japanese economy as a whole.
Despite these concerns, the deal is likely to go ahead as planned, with JIP and its partners expected to complete the buyout in October. For Toshiba, the move marks the end of an era as it transitions from a publicly traded company to a privately held one. It remains to be seen how the company will fare under its new ownership, but the takeover offer from JIP represents a new chapter in Toshiba’s long and storied history.