Toshiba unveils new plan to split into two companies

Japan's Toshiba yesterday announced plans to split into two companies, revising a controversial proposal to divide into three following a tumultuous period for the storied industrial conglomerate.

As part of the proposed plan, Tokyo-based Toshiba Corp. intends to sell its joint venture stake in Toshiba Carrier Corp. to the U.S.-based Carrier Group, for about 100 billion yen ($877 million).

Toshiba is also selling Toshiba Elevator and Building Systems Corp. and Toshiba Lighting & Technology Corp., it said yesterday.

The group said it plans to spin off its device segment, including its semiconductor business, in a bid to speed up decision-making and boost stock performance.

Shareholders, who have clashed with management on the best way forward for the troubled company, must still approve the proposal in a vote expected in March. The original spin-off plan faced stiff opposition from some key investors.

The firm also said it will unload its stake in air-conditioning business Toshiba Carrier and seek to sell its elevator and lighting units.

"We believe a spin-off is optimal," president and CEO Satoshi Tsunakawa told investors, promising it would "enable more agile and flexible operations."

He said the sprawling business "struggled with the conglomerate discount and slowness in decision-making" in the past, and streamlining operations would allow investors to choose the portion of the business that interested them.

Toshiba initially unveiled a plan to split into three last November, in what analysts called a test case for other Japanese giants.

But it said yesterday that "since this is the first large-scale spin-off transaction in Japan... it turned out there were obstacles which were not initially...