Toshiba Corp has not had a terrific year this time around. Stuck by one loss after another, the Japanese tech giant seems to have changed its strategy. According to sources, the company is looking to buy small and medium-sized firms, but the ones adjacent to its infrastructure services and digital technology business. The strategy seems to be sticking closer to its home in japan and minimize the risk of failure.
According to sources, the company is compiling a list of targets and is considering borrowing to bankroll the deals. Still, the tech giant pledged to tread cautiously to avoid past mistakes. It’s still trying to raise capital by unloading its 40% slice of Kioxia Holdings Corp. However, Kurumatani, the company’s CEO, stated that he wouldn’t be drawn on when its chip spinoff might revive its delayed initial public offering.
Once synonymous with the global ascent of corporate Japan, Toshiba is trying to put years of scandal and missteps behind it. It narrowly avoided a delisting from the Tokyo Stock Exchange three years ago after multibillion-dollar losses at its Westinghouse US nuclear unit pushed liabilities beyond the level of its assets.
Nobuaki Kurumatani stated, “One thing that changed is that I’m in charge now. The board is also applying very stringent standards to acquisitions. It’s a completely different company when it comes to the rigor brought to thinking about and screening deals.”
Reports indicate that the CEO can make purchases under ¥10bn, for which he doesn’t need the board’s permission. But he states that opportunities for short-term profit gains won’t lure Toshiba. Instead, it will make sure that it gets a sufficient return on invested capital. It won’t consider deals where it doesn’t have full confidence in integrating the target.
