Busy Week for Toshiba, Thanks to $6 Billion Sale, $3 Billion Investment
TOKYO — Japan’s Toshiba has sold its medical devices unit to camera and office equipment maker Canon for almost $6 billion, as it sheds businesses to recover from a major accounting scandal. The deal came as Toshiba’s share price plunged nearly 8% after a report it was under investigation by U.S. authorities over allegations it hid losses in its nuclear business.
News of the Canon deal comes as Toshiba expects a whopping loss of about $6.0 billion for the year to March due to sagging global demand and a profit-padding scandal, in which high-handed bosses for years systematically pushed their subordinates to cover-up weak financial figures.
In the wake of the scandal, Toshiba — a vast conglomerate that makes everything from rice cookers to nuclear plants — has ushered in thousands of job cuts and plans to sell various business units in a bid to revive its fortunes.
Under the deal, Toshiba sold all its shares in Toshiba Medical Systems, a major producer of medical imaging tools such as MRI and CT scans, to Canon for 665.5 billion yen ($6.01 billion).
Separately, Toshiba said it had reached a basic accord to sell a majority interest in its home appliance business to China’s Midea, though a Toshiba spokeswoman said a price for the deal had yet to be announced. She said the two sides were scheduled to reach a final accord by the end of March.
Sales in Toshiba’s home appliance business came to 225.4 billion yen ($20.04 billion) for the fiscal year to March 2015, the most recent annual figure available.
In December, Japan’s Securities and Exchange Surveillance Commission said Toshiba should be slapped with a record 7.37 billion yen ($66.55 million) fine over the profit-padding scheme that hammered the reputation of one of Japan’s best-known firms.
Many Japanese high-tech companies are rushing to enter the medical field, as a graying population boosts demand for healthcare services and tools. Sony launched a medical joint venture with endoscope maker Olympus, which also went through a massive loss-hiding scandal and required a strong partner to rebuild itself.
In related news, Toshiba is also investing 360 billion yen ($3.25 billion) on a new factory for flash memory chips. The company is investing in the plant, which will make its proprietary 3-D flash chips, over a period of three years till March 2019, according to a statement Thursday. Toshiba expects output to begin no earlier than 2018.
Annual capital spending on Toshiba’s semiconductor and storage operations, which include hard drives, amounted to about 200 billion yen over the past three fiscal years, according to Yukihito Uchida, a spokesman for the company. It maintains a flash memory partnership with SanDisk Corp. and is in talks with the U.S.-based company about investments in 3-D flash, Uchida said.
Copyright Agence France-Presse, 2016
