Toshiba Crop have planned to break up into two companies to raise shareholder return

Toshiba Corp. now decided to split into two companies instead of three and deliver a major boost in planned shareholder returns in an effort to appease angry investors.

Its revised plan is still expected, however, to face much backlash from foreign hedge funds, many of whom are opposed to any divestiture and would prefer that the scandal-ridden Japanese conglomerate be taken private.

With this new structure, Toshiba will break up in its device business including the chip unit. In its previous structure, it aimed to split into three companies – one for energy and infrastructure, second for devices and other for flash memory chips.

The industrial conglomerate now plans to increase shareholder returns to 300 billion yen (SU$2.6 billion) over the next two years, compared with an earlier target of 100 billion yen returns.

It also plans to begin a sales process for its elevator and lighting business and said it no longer sees Toshiba Tech Corp., which develops point-of-sale systems. Toshiba has also said that Kioxia, the chip business in which it holds 40.6%, should conduct an IPO as soon as possible. It is also considering a possible sale of its stake in Kioxia.

Toshiba is owned by about 30% foreign funds, many of which appear to be opposed to the divestiture. The two-thirds could force the group to abandon its plan. Earlier it had announced that it would transfer its approximately 60% stake in its air conditioning unit to its United States joint venture partner Carrier Global Corp for $870 million.

Toshiba Corp manufactures electrical and electronic products. It include digital products such as PCs and TVs, NAND flash memory and systems LSI (largely integrated), as well as social infrastructure such as medical equipment, power generators, and home appliances.