Toshiba to be bought by Japan Industrial Partners-led group
Toshiba, based in Tokyo, is set to be acquired by a group led by private equity firm Japan Industrial Partners. According to Japanese media, Toshiba’s board of directors accepted the group’s $15 billion buyout offer.
If the deal goes through, JIP and its other investors, which include Orix Group, Rohm Co, and Chubu Electric Power, will own one of Japan’s most popular companies. This would also be the third-largest transaction in the world this year, according to Refinitiv data.
The consortium presented a binding buyout proposal backed by $10.6 billion in major bank loans. According to Reuters, some board members were dissatisfied with the offer price, so the board waited several weeks before voting.
The process was repeatedly delayed because the JIP-led group encountered difficulties in obtaining financing as banks became overly cautious in a volatile economic environment.
Toshiba has been embroiled in accounting and corporate governance scandals since 2015, suffering heavy losses and clashes with activist investors that eventually led to its 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.
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 firm in two was rejected by stockholders. The investors preferred selling the company to private equity, but the split was seen as an alternative.
The company sought out strategic options for Toshiba’s future as the plan failed. Eventually, JIP was chosen as the preferred bidder in Oct..