Lack of due diligence on to the company post the conglomeration was cited as one of the major reason for this acquisition failure.
Amalgamation of differentiated leagues
In was in the historic year of 2006 that the president of the Toshiba Corporation declared to set up the apprehension of being the world’s standalone nuclear reactor manufacturer by the corporation president Nishida.
With this Nishida also announced the collaboration of the US bases Westinghouse Electric Corporation to work around the similar venture of the unification. As in whole it was a sum of about 5.4 billion USD which Toshiba had paid to acquire Westinghouse. Even of the premium which they had to pay in order to acquire Westinghouse was criticised to an upper level.
Various investor called upon to say that Nishida has certainly plunged over this catastrophic bid decision of the acquisition because the president was more of inclined to the fact that he wanted to make japan then the major developer and exporter of the nuclear technology. The acquisition of 2006 was proving itself to be full of disaster and upheaval for the core business of Toshiba. Toshiba had ascertained the acquisition with the objective that it would act as leverages for the infusion in the foreign markets but as sorted never happened to be the same.
When these two organisation are being taken into account as of to the nature of domains which they held it can be made evident that these two established bodies were of different working nature and exhibited varied niches to work upon apparently a sense of significant risk was associated with the same.
The ailing collaboration
As of the various underlying facts which were being taken into consideration regarding the failure of this acquisition, the management of Toshiba overlooked this and still approve their being for the purchase and the collaboration was disguised in the belief that the acquisition could be looked upon as the best possible way to even recover on a good note from all there legal non compliance’s in terms of Westinghouse.
The renaissance of the atomic power in Japan was subsequently found to be a the centre piece in the country .It was put forth that the collaborated firm would come together to build across about 33 nuclear reactors. Since the time of acquisition from 2006, the potentially access of the intended outlook of Toshiba in the nuclear power market was boasted as to be pronouncing the emergence of a new era of the nuclear energy manifestation
As the acquisition took place it was certainly being seen that the nuclear technology shall soon grow the business domain across the globe.
Because of the severe impact of the ailing business of Westinghouse its direct impact was also seen on the Toshiba’s executive rank as they were amidly facing a loss of huge amount of financials for the same.
And finally the most explicit turning point in the acquisition came up and Toshiba had to face extreme financial crisis because of the failure in all those heavy investments which they had made in the US based firms Westinghouse Electric Corporation. The great loses were high in term and were valued approximately in billion values.
Downturn in the nuclear industry
The nuclear industry had now witnessed a downturn and soon the crisis were being felt by Toshiba, even more worsening of the situation took place when Westinghouse was being taken under the risk management law which even was a result of the inadequate governance of Toshiba .As a result of this downfall in the nuclear technology various implications were set aside and consecutively they lead to a strict regulation control in the management and infrastructure of the nuclear facilities in all those US plants of Westinghouse. As a result of these all strict lawsuits which were being held upon the construction firm , it lead to the goodwill impairment of a huge sum of approximate amount of 625.3 billion.which when was combined with the irrecoverable loses ever since the acquisition , it accounted for even more amount of about 712.5 billion.
Spin off of the troublesome acquisition
The acquisition ascertained by trouble was finally made to sell off because of the associated bankruptcy terms which were being claimed with the same. Despite of the various developments which were being accompanied with the acquisition of these two conglomerate organisations the sale of the business unit of the semiconductor domain lead to the ardent crisis of all time
Westinghouse was ascertained more of a construction company based upon the nuclear value. Even since the acquisition had taken place most of the time Westinghouse was occupied amidst the legal battles fortifying its way to make out of them legal contingencies.
Examination of the financial speculation
When were allegation of financial gamble were being subjected to Toshiba, and the Japanese securities and exchange surveillance commission examined the review report in detail as to how the 2016-2017 financials report could attend justifiable or not .
With the serious delay pertaining in the nuclear power projects the financial burden was being raised drastically to an upper level and finally the situation of bankruptcy took place as it was within second year in a row that Toshiba took a write off of about 6.3 billion USD. Eventually in the march of 2017 the operating losses when on to be even high with approximately about 410 billion yen and the association was known down for the ever biggest failure though being nuclear empowered.