Japanese electronics maker Toshiba (TOSYY) announced Friday that it plans to split into three companies by 2024 in what the company says is a first-ever-spinoff for a company of its size.
Toshiba will split into an infrastructure service company, an electronic devices and storage company, and a third company that will keep the Toshiba name and manage the company's stake in Kioxia Holdings, a flash-memory company.
"Over our more than 140-year history, Toshiba has constantly evolved to stay ahead of the times. Today’s announcement is no different," said Satoshi Tsunakawa, Toshiba CEO, president and interim chairperson.
"In order to enhance our competitive positioning, each business now needs greater flexibility to address its own market opportunities and challenges."
The infrastructure service company will consist of Toshiba's energy systems and solutions, infrastructure systems, building solutions, digital solutions and battery businesses. The unit is expected to have $18.3 billion in fiscal revenue this year.
The device company will feature Toshiba's semiconductors, optical semiconductors, analog integrated circuits, high-capacity hard disk drives and other hardware. That division is expected to have revenue of $7 billion.
The division that keeps the Toshiba name will seek to convert shares of Kioxia into cash "as soon as practicable."
The decision comes after a five-month review process that concluded that a separation into three standalone companies would enhance the most shareholder value.
Toshiba has been active in unloading certain units in recent years, including medical devices, personal computers, consumer electronics and Westinghouse Electric, its U.S. nuclear power unit that declared bankruptcy in 2017, according to the Wall Street Journal.
There have been a slew of company split-up announcements in recent days, with General Electric (GE) - Get General Electric Company Report and Johnson & Johnson (JNJ) - Get Johnson & Johnson Report both announcing plans to spin off their business segments.