Why it matters: For around 146 years, Toshiba has been ane of the symbols of Japan'due south loftier-tech manufacture, growing from a consumer electronics company into a giant that can also build power plants. After selling its memory business to stay adrift, the company volition now suspension itself into three separate entities in response to pressure from activist shareholders.

Toshiba today announced plans to split into three separate companies that volition focus on semiconductors, infrastructure, and devices.

According to Reuters, the move is at least partially motivated by lessons learned from the corporate governance scandal from 2022. The main goals are to amend shareholder value and encourage activist shareholders like Elliott Direction, Farallon, and Third Point to exit.

The visitor says information technology will divide its core operations into 2 new publicly traded companies — one for nuclear power and infrastructure services, and one for devices. What remains of the Toshiba business will continue to exist as a separate entity that will concord a 40.6 percent stake in retentivity chipmaker Kioxia and other related avails.

The reorganization process is expected to be completed by the second one-half of 2023, and the company also plans to deliver 100 billion yen ($875 million) in shareholder returns over ii years. CEO Satoshi Tsunakawa said in a statement that "over our more than 140-twelvemonth history, Toshiba has constantly evolved to stay ahead of the times. In society to enhance our competitive positioning, each concern now needs greater flexibility to accost its own market opportunities and challenges."

Toshiba'southward iii-way split comes merely days later 129-year sometime conglomerate General Electric appear a similar move.

The two companies are joined by Johnson & Johnson, which likewise appear it will interruption itself into two companies. Meanwhile, the rumor mill says Western Digital is in advanced talks with Kioxia for a possible merger that could exist valued at over $xx billion.