Toshiba, the Japanese multinational conglomerate, has made headlines with the success of its $14 billion tender offer from private equity firm Japan Industrial Partners (JIP). This breakthrough will enable Toshiba to go private, marking a significant development in its tumultuous history.
The JIP-led consortium managed to acquire a majority stake of 78.65% in Toshiba shares tendered. This majority gives JIP over two-thirds control, ensuring that Toshiba will be under domestic ownership. For years, Toshiba has faced numerous battles with overseas activist investors, but this deal puts an end to that era. The company is now expected to be delisted from the stock market in December.
Toshiba accepted the buyout offer back in March, valuing the company at 2 trillion yen. Although some shareholders expressed dissatisfaction with the price, Toshiba argued that there were no prospects of receiving a higher offer. The announcement of JIP’s successful tender offer concludes the matter.
One of the key factors contributing to JIP’s bid victory was the promise of retaining Toshiba’s CEO, Taro Shimada. This decision reassures the company’s stakeholders and employees, as it ensures a sense of continuity and stability during this transition. The cooperation between management and new ownership is predicted to significantly improve morale within the organization.
JIP is renowned for its expertise in corporate carve-outs and spin-offs, having successfully orchestrated similar endeavors in the past. It has notably handled Olympus’s camera business and Sony Group’s laptop computer business. With such experience under its belt, JIP is well-positioned to guide Toshiba through this transformative phase.
The consortium backing JIP comprises 20 prominent Japanese companies, with chipmaker Rohm, financial services firm Orix, and Chubu Electric Power leading the way. This collaboration demonstrates the strong support from domestic entities in keeping Toshiba’s operations in Japan.
This acquisition makes history as the largest mergers and acquisitions (M&A) deal in Japan this year. Interestingly, Japan remains the only major market in Asia to experience growth in M&A activities. The involvement of private equity firms, as seen in the planned $6.4 billion buyout of materials maker JSR, has contributed to this upward trend in deal-making activities.
With the successful tender offer now behind it, Toshiba and JIP can focus on the next steps of transforming the company into a privately-owned entity. As Toshiba prepares for delisting, the industry eagerly awaits the outcomes that this new chapter will bring.