On January 18, Toshiba stated that they will sell the ownership of their own bankruptcy nuclear power business unit, Westinghouse, to a group led by the hedge fund Baupost Group. After the sale of Westinghouse Electric, Toshiba’s assets will increase by 401 billion yen (approximately US$3.68 billion).
At this point, the pair of once-influenced “partners†parted ways.
From the 2006 hand in hand to the 2017 separation, in the eleven years, unpredictable variables have made the relationship between Toshiba and Westinghouse TV dramas ups and downs.
Origin: To expand overseas nuclear power market
In February 2006, Toshiba acquired US-based Westinghouse Electric, a nuclear power equipment company to which BNFL belongs, for US$5.4 billion, and 5.4 billion was four times the 1999 British nuclear fuel company’s acquisition of Westinghouse. It can be seen that Toshiba’s potential for the overseas nuclear power market is a must. At that time, this acquisition will allow Toshiba’s nuclear power technology business to expand threefold. The world’s nuclear power equipment manufacturing industry will also form a three-tiered pattern of Japan, the US and Europe.
However, the 2011 nuclear leak in Fukushima in Japan and the collapse in natural gas prices made the nuclear power business unattractive. The Japanese government immediately shut down all domestic nuclear power plants. In the following years, the nuclear power business continued to lose money. Coupled with the subsequent financial scandal, Toshiba reported a huge loss of US$4.2 billion in the third quarter of 2015. In 2016, it was insolvent. In February 2017, Toshiba Chairman Shiga Shige, who co-ordinated nuclear power, also resigned.
The sustained loss of fermentation indicates that Toshiba’s dream of overseas nuclear power is broken.
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In order to fill the loss-making loopholes, Toshiba avoids delisting by selling its business, which also includes profitability and promising chip business.
At the end of 2015, Toshiba sold the land and construction assets (approximately US$25 million) of its independent color TV production plant and two-bay washing machine manufacturing base to Skyworth Group.
In 2016, Toshiba sold its subsidiaries, which are mainly white goods businesses such as washing machines and refrigerators, to Midea Group.
In February 2017, Toshiba sold a 1.78% stake in JapanDisplay. Japan Display Corporation was founded in 2012 by the merger of the sluggish display manufacturing divisions of Sony, Toshiba and Hitachi at the time. Toshiba did not disclose how much cash it would receive for selling this portion of the shares of Japan Display.
On March 2, 2017, Toshiba announced that in order to raise funds to avoid a financial collapse, the company will sell almost all of the shares held by Toshiba Machinery for US$134 million. In the same month, Toshiba began to transfer the entire equity of Toshiba Storage, a subsidiary of the flash memory business. Its valuation is close to 17.4 billion U.S. dollars, and the funds are huge. Therefore, it is estimated that the bidding party will form a consortium for the acquisition. Due to the huge demand for flash memory chips from mobile devices, Toshiba's flash memory subsidiary has become a coveted gift for Foxconn, Apple, Midea and other global electronics industries.
In November 2017, Hisense Electric will acquire a 95% stake in Toshiba Video Solutions, a subsidiary of Toshiba Television. The transaction amounted to approximately RMB 763 million and the acquisition will be completed by the end of February 2018.
On December 4, 2017, Western Digital and Toshiba tended to reconcile and wanted Toshiba Semiconductor shares. The original two were partners in the semiconductor business (mainly flash memory chips), but they were “contrary†because of Toshiba’s sale of semiconductor business. In Western Digital's view, the sale may lead to the leakage of its flash memory technology and also affect future earnings.
Now that the crisis has been suspended, Toshiba can temporarily breathe a sigh of relief. However, with the sale of many core businesses, Toshiba is also facing a new round of survival tests.
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