Economy

Toshiba to sell prized chip unit to Japan-US-South Korean syndicate

Toshiba to sell prized chip unit to Japan-US-South Korean syndicate

The Japanese firm's memory unit is the world's second largest NAND flash memory chip producer. To complete the sale, Toshiba may have to overcome continued resistance from joint venture partner Western Digital.

U.S. private equity firm Bain Capital will lead the worldwide consortium, along with other investors such as Apple, which has reportedly invested at least $3bn. It has opposed the sale of Toshiba's chip business from the very beginning, arguing that the business segment includes joint venture agreements that can not be sold off without Western Digital's approval.

The Bain-led group was identified as a preferred bidder nearly three months ago, but the process has been delayed by the lawsuits, government opposition and corporate indecision.

The decision was made at a board meeting following a last-minute bid by Western Digital, which jointly invests in Toshiba's Yokkaichi flash memory plant.

Western Digital said in a statement that it was "disappointed Toshiba would take this action despite Western Digital's tireless efforts to reach a resolution that is in the best interests of all stakeholders".

More news: 1 shot, shooter arrested at Mattoon High School

Toshiba is selling off its chips business to pay for billions of dollars in losses in its US nuclear business. Bain is thought to have support from Apple, Dell and SK Hynix, as well as other memory consumers.

The auction has gone through dizzying twists and turns.

Last week, Toshiba said it had entered into a non-binding memorandum of understanding with Bain Capital Private Equity to negotiate a "mutually satisfactory definitive agreement" for the sale of the chip business by the end of the month.

The consortium has put forward an acquisition offer of some ¥2.4 trillion, including funds for equipment investment. It's not clear exactly how much capital Apple will ultimately contribute to the offer.


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