Where are Toshiba going? February 21, 19:47

"We will divide the company into three."


Toshiba announced an unusual plan last November.

However, this month, we will hurry to make major revisions to the content.

The company is split into two instead of three.

In addition, it will sell three businesses, including the company's roots.


Conflict with shareholders, objection Smoldering in-house.

From the interviews with the people concerned, we can see "further confusion".

(Kenta Shimai, Reporter, Ministry of Economic Affairs)

Rapid change in just 3 months

Toshiba's confusion continues.


Nuclear power, power generation, railways, IT, semiconductors ...

Toshiba is a conglomerate with many businesses.



Last November, we announced an unusual plan to "split the company into three".



The value of the entire company may be less than the total value of each business ...


This is because such a point was raised by a major shareholder.

So Toshiba split the company into three.


We listed each of them and aimed to make it easier for each business to evaluate its value.

However, only three months after this announcement, this month 7th.


Toshiba reviewed the plan and revised it to "two division plan".

If the plan is also unusual, it is also unusual to modify the plan in such a short period of time.



The company said, "We found that it would cost tens of billions of yen to divide the company into three parts and list each one. To reduce that cost," he said as a reason for cost reduction.



But that's not all.


Behind the scenes is the existence of “shareholders who say things” where conflicts continue.



Singapore's asset management company, which is a major shareholder and whose conflict with Toshiba has surfaced, expressed opposition to the initial three-part split plan, saying that it would not "fundamentally solve the company's problems."


Other major shareholders have also expressed concern that they should not proceed without a lot of approval.

At a press conference on February 7, Toshiba President Tsunakawa also said, "We listened to the opinions of various shareholders and tried to incorporate what we thought was" I see. "" There was "the existence of shareholders" in the background of the revision. Revealed.

e?

Will you let go of that business?

The market was tumultuous with the policy shift from "three splits" to "two splits," but what surprised the people involved was the "subsidiary sale plan" announced at the same time.

[Proposal to sell the subsidiary]


○ Sell the air conditioning business for 100 billion yen → To the joint venture American company


○ Elevator business → Aim for sale agreement


during the next fiscal year ○ Lighting business → Aim for the sale agreement during the next fiscal year

Of these, the "elevator business" is one of Toshiba's representative businesses.

Many people may have seen the "TOSHIBA" logo on the elevator in the building.



It was commercialized in 1966.


Although it is a latecomer in the industry, it developed the world's fastest elevator at a speed of 1010 meters per minute (Guinness was also certified in 2004), saying, "Because it is a latecomer, we have challenged epoch-making things." It is installed in the building of.



It has many achievements such as being adopted in large facilities such as Tokyo Sky Tree and Abeno Harukas, with sales of approximately 225 billion yen and more than 12,000 employees.



Four years ago, the management plan stated that it was a business that could lead the industry and had growth potential, but this time it turned out to be a non-core business, saying that it has a weak relationship with businesses such as power generation and semiconductors that should be focused on in the future. It was positioned as a target for sale.

And another "lighting business" to be sold.



"Incandescent building was founded in 1890 as the first incandescent lamp manufacturing company.


Later, he developed various electronic products and renamed them TEPCO in 1899 ”(Toshiba website).



The lighting business is one of Toshiba's well-known roots.


This business, which has been illuminating our daily lives and Japanese industry since the Meiji era, is also considered to be a "non-core" and has been sold this time.

President Tsunakawa (February 7)


"While focusing on businesses such as carbon neutrality and infrastructure toughening that virtually eliminate greenhouse gas emissions, we decided that businesses far from that would grow better if we partnered with other partners. rice field"

How does the company perceive these policies?


As I proceeded with the interview, I found that there was smoldering internal disagreement, especially regarding the sale of the elevator business.

Person concerned 1


"Now that the home appliances business has already been sold out, the elevator business is one of the few businesses that has contact with general customers. It also has many large customers such as railway companies and real estate companies. The sale of the business was unavoidable due to the critical business situation, but the current business situation is not so bad. There may be no need to sell it. "

Person concerned 2


"If it is not a core business, there are other businesses that should be sold. Both the air conditioning and elevator businesses are invested by other companies and there are sales destinations. Isn't it? "

Anxious "shareholder return"

There was a shareholder in the background of changing the plan from "3 splits" to "2 splits", but is it the same with the sale of subsidiaries?



I found a word that I was interested in in the presentation material that summarized the plan.


It is "shareholder return".



"Shareholder return" that returns a part of the profits made by the company to investors (shareholders).


Typical methods are to increase dividends or buy back shares to reduce the number of shares in the market and increase the value accordingly.

Toshiba had previously said that it would return 100 billion yen, but this time it has tripled it at once and has announced a policy of returning 300 billion yen over the next two years.



In the first place, the purpose of the two-part split of the company was to eliminate the so-called conglomerate discount, where the company's evaluation (= stock price) is "1 + 1 = 2 or less".



Toshiba's stock price is about 4500 yen (as of 2/21).


If you split a company into two, shareholders will have the shares of the two split companies.


If listed, each will have a price, and there is a possibility that it will be "1 + 1 = 2 or more".



And the sale of the subsidiary.



If the procedure is completed, the company will temporarily get hundreds of billions of yen.


It is also possible to increase dividends and buy back shares using this as a starting point.



So, is the purpose of selling the elevator business and lighting business to "return to shareholders"?



President Tsunakawa emphasizes that there is no direct causal relationship.

President Tsunakawa (Meeting on February 7)


"The sale of the business has been under consideration since last year. While we are investing in our focus businesses, we will return capital that exceeds an appropriate level to our shareholders. "

However, company officials tell the interview:

"It can be seen that the funds obtained from the sale of the business are being used to return to shareholders. Will the business be sold and returned if the shareholders request it in the future?"

"Two splits" and "sale of subsidiaries".


In each case, the elements of shareholder measures are bleeding.

Shareholders still unsatisfied

On the other hand, how do shareholders perceive it?



Many of the “shareholders who say things” have bases overseas, and of course they rarely reveal their ideas.


However, as I proceeded with the interview, I found that I was not satisfied with the revised plan.


The contents of the story are as follows.

[Reactions from shareholders]


○ The new policy is insufficient in the following points.


 -There is no synergy in the IT business and HDD for storage.


  You should proceed with the sale.


 -Insufficient return to shareholders, should be able to pay at least 600 billion yen.

It is said that more businesses should be separated and shareholder returns should be further increased.



In addition, we have heard opinions calling for another response that is neither a split nor a sale.


It is the "unlisting" of the company.



Toshiba is a listed company on the First Section of the Tokyo Stock Exchange and has many shares in the market.


In order to make it "unlisted", the company must buy back all the shares in circulation or a specific investor must buy them.



In order to buy back (collect) stocks for unlisting, it is common to buy at a high price, which is the market price (= stock price) plus an additional amount called premium.


In other words, there are cases where it is beneficial for shareholders who accept the purchase.



However, the side to buy back (collect) requires a huge amount of funds of several trillion yen, which is not easy.



By the way, this "unlisted".

About a year ago, an overseas investment fund once proposed it.



However, since Mr. Nobuaki Kurumatani, who was the president of Toshiba at that time, was once an executive of this fund, it has been pointed out that the background of the proposal is unclear, and it has not been realized.

Of course, not all shareholders have similar opinions.

The shareholding ratio of "shareholders who say things" is about 25%.


It seems that there are some institutional and individual investors who support the company's policies and plans.



Toshiba will confirm the intentions of shareholders at an extraordinary general meeting of shareholders to be held on March 24th.



The plan of "company split into two" and "sale of subsidiary" was reworked while seeking to overcome the opinions of shareholders and the conflict with shareholders.


However, this time as well, the reaction of shareholders who say things is not good.



The dark clouds over Toshiba are still not sunny.

Deepening confusion, where to go

Fraudulent accounting in 2015 and huge loss of nuclear power business in 2017.


Toshiba, which was in a financial crisis, sold the memory business, medical business, white goods business, TV business, personal computer business, etc., which were the top earners.



And the remaining main body is also divided into two.


We are going to let go of the elevator, lighting and air conditioning businesses.

<Toshiba's reflection points>


-Coexistence of businesses with different business models-


Increased management complexity due to the existence of businesses that do not produce synergistic effects-


Management teams from different origins lead management, making decisions It took a long time


-investors who are only interested in each business have no choice but to invest in "Toshiba Co., Ltd."

It was written like this in the February announcement material.



At the press conference, President Tsunakawa said, "This is a necessary step toward the optimal solution."



Is it possible to derive not only the optimal solution for shareholders and general shareholders, but also the optimal solution for employees and business partners?


And will the day when the "TOSHIBA" brand regain its brilliance come again?



The "Tanaka Factory", which originated from Toshiba, was founded in 1875.


A leading Japanese company with a history of more than 140 years is at a critical crossroads.

Reporter of the Ministry of Economic Affairs


Kenta Shimai


Joined in 2012


After working at the Miyazaki and Morioka stations, he is currently affiliated.


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