Toshiba may book loss related to Landis+Gyr acquisition – report (translated)
13 FEB 2017
Toshiba Corp [TYO: 6502] is considering booking a loss related to the USD 2.3bn acquisition in 2011 of Switzerland-based smart grid and metering company Landis+Gyr, Nihon Keizai Shimbun reported.
As of September last year, the company's brand value was worth JPY 143.2bn (USD 1.27bn), and Toshiba may have to cut the book value of Landis+Gyr. It is also believed to be mulling an option to sell the company, the Japanese newspaper report said on 12 February, without citing sources.
In April last year, Mergermarket reported that Toshiba was exploring the potential sale of its stake in Landis+Gyr, citing sources briefed on the situation.
Toshiba and Innovation Network Corporation of Japan (INCJ) in 2011 jointly acquired Landis+Gyr for USD 2.3bn, with Toshiba taking a 60% stake and INCJ the remaining balance, the newspaper report said.
The potential loss-booking related to the acquisition is on the back of the development of Toshiba's expected losses in its nuclear power business, according to the report.
On 27 December, Toshiba announced that the company expected to record goodwill of several hundred billion JPY (several billion USD) related to the acquisition of CB&I Stone & Webster by its US nuclear business subsidiary, Westinghouse Electric.
Following the announcement, Toshiba is believed to have taken a severer stance in evaluating business conditions for the company and future prospects of Landis+Gyr, the newspaper report said.
The Swiss company had an operating profit of JPY 3.4bn in the first half-year of its fiscal 2016, or a 44% year-on-year fall, on sales of JPY 84.5bn, a 9% YoY decline, according to the report.