Toshiba, the longstanding industrial conglomerate, announced on Thursday the successful completion of a $14B tender offer from the private equity firm Japan Industrial Partners (JIP). It marks a significant milestone that clears the path for Toshiba’s transition to a privately-held company.
In a resounding victory for the JIP-led consortium, 78.65% of Toshiba shares were tendered. It is granting the group an overwhelming majority of more than two-thirds—a position that allows them to force out any remaining shareholders.
This development brings Toshiba, with its 148-year history spanning from electronics to power stations.
It is firmly into domestic hands after years of grappling with overseas activist investors and partners. The company is now on track to be delisted from public stock exchanges as early as December. Commenting on the deal, analyst Travis Lundy of Quiddity Advisors, who contributes to Smartkarma, remarked, “Activist shareholders and Toshiba were stuck with each other for years. This takeover allows both sides to escape their mutual bearhug.”
Toshiba initially accepted the buyout offer in March, which valued the industrial conglomerate at 2 trillion yen ($13.5 billion). While some shareholders expressed dissatisfaction with the offered price, Toshiba defended its stance, asserting that there were no prospects of a higher offer or competing bids.
In a statement on Thursday, Toshiba’s Chief Executive Taro Shimada expressed gratitude, saying, “We are deeply grateful to many of our shareholders and partners for being understanding of the company’s position.” He added, “Toshiba will now take a major step toward a new future with a new shareholder.”
JIP, the private equity firm at the helm of this transformative move, intends to retain Toshiba’s CEO, Taro Shimada, to ensure continuity in leadership. Travis Lundy remarked, “I expect the prospect of management and new ownership alignment will improve morale. However, to succeed, management needs to be able to tell a better story to investors coming out of this.”
While JIP may not be a household name overseas, the firm has been actively involved in corporate carve-outs and spin-offs from Japanese conglomerates.
Such as Olympus’s camera business and Sony Group’s laptop computer business. Since 2015, Toshiba has grappled with accounting scandals, substantial financial losses, and near-delistings, in addition to corporate governance controversies. The JIP-led consortium comprises 20 Japanese companies, with chipmaker Rohm, financial services firm Orix, and Chubu Electric Power leading the way.
This transaction represents Japan’s largest M&A deal of the year and underscores Japan’s status as the only major Asian market experiencing growth in mergers and acquisitions this year, as reported by LSEG data. Private equity deals, including the planned $6.4 billion buyout of materials maker JSR by a government-backed fund, have been particularly active in Japan’s M&A landscape.
