Toshiba plans to split into three independent companies

Multinational conglomerate Toshiba revealed on Friday that it intends to split into three independent companies as part of an effort to appease activist shareholders.

Toshiba's decision, which comes hot on the heals of a similar move by fellow industrial conglomerate General Electric, will see the Japanese firm spin off its core energy and infrastructure divisions into one company, while its device and storage businesses will make up another.

A third unit will handle Toshiba's stake in flash-memory chip firm Kioxia and other assorted assets.

Toshiba's proposed break-up runs counter to some shareholders' calls for the firm to be taken private. However, the group's strategic review committee stated that option had raised concerns about its impact on the overall business and staff retention.

"After much discussion, we reached the conclusion that this strategic reorganisation was the best option," said chief executive Satoshi Tsunakawa.

As part of the overhaul, Toshiba will look to return roughly JPY 100.0bn (£653.45m) to shareholders over the next two financial years but several investors have said they were not convinced that a break-up would create value.