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Toshiba to go private after 74 years: A $14 billion deal with Japan Industrial Partners (JIP)

Toshiba is set to go private after 74 years as part of a 14 billion deal from private equity firm Japan Industrial Partners (JIP). The JIP-led consortium saw 78.65% of Toshiba shares tendered, giving the group a majority of more than two-thirds which would be enough to squeeze out remaining shareholders. This move puts the 148-year-old electronics-to-power stations maker in domestic hands after years of battles with overseas activist investors.

Toshiba has been under strong pressure from overseas investors to consider privatization. Foreign investors gained greater influence in 2017 when they injected billions of dollars to improve Toshiba’s balance sheet.

This privatization move is expected to help Toshiba pursue its long-term strategy centered on high-margin digital services. The company has said that its complex relationships with various stakeholders, including shareholders with different opinions, have hampered business operations and that a stable shareholder base would help the company pursue its long-term strategy centered on high-margin digital services.

The deal is set to be Japan’s biggest deal in 2023 and will allow JIP to squeeze out the remaining shareholders and take full control of the company. Toshiba, whose roots go back to 1875, said the JIP-led consortium now holds 78.65% of all its shares. Although some shareholders were unhappy with the price, Toshiba argued that there was no prospect of a higher offer or competing bid.

This takeover allows both sides to escape their mutual bearhug. Analyst Travis Lundy of Quiddity Advisors said, “Activist shareholders and Toshiba were stuck with each other for years”. The prospect of management and new ownership alignment is expected to improve morale. However, management needs to be able to tell a better story to investors coming out of this.

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105 thoughts on “Toshiba to go private after 74 years: A $14 billion deal with Japan Industrial Partners (JIP)”

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