Toshiba chip business set for $18B sale to Bain-led group backed by Apple

Toshiba Chip

Toshiba is a name of a trust when it comes to manufacturing of NAND memory used in phones and PCs. It is known to be the second largest supplier of NAND memory chip. Toshiba retained its identity in the market for a long time. Recently, the company has agreed an $18 billion sale to a consortium led by Bain Capital, which is backed by Apple. Well, Apple never looses chance of some strategic investments over its rivals.

Toshiba had to take this step, to offset losses from its bankrupted Westinghouse nuclear business. It fears to be delisted from the Tokyo stock exchange next year.

It is one of the most important deals not only for Toshiba, but also for other tech industries. Apple had a fear that Samsung – who nearly covers 40 percent market share in memory space – can profit from this deal. Earlier this month, there was a deal agreed in principle by KKR, and with rival offers. Additionally, two Japanese funds were rejected. Now, Toshiba provided its approval.

Toshiba has signed off an agreement that will see Pangea, a consortium led by Bain. Beyond Bain, the bid is backed by Japanese medical devices firm Hoya, chip firm SK Hynix and U.S. firms Apple, Kingston, Seagate, and Dell.

Toshiba itself has pledged to reinvest 350.5 billion JPY ($3.1 billion) with Bain, Hoya, SK Hynix and the U.S. contingent down to provide 212 billion JPY ($1.8 billion), 27 billion JPY ($240 million), 395 billion JPY ($3.5 billion), and 415.5 billion JPY ($3.7 billion), respectively.

In order to satisfy government concerns, the consortium has agreed to give both firms Toshiba and Hoya 50% of voting power. SK Hynix will be “firewalled” from accessing IP or other competitive information on the TMC business.

Toshiba needs anti-trust approval and the green light from a Japanese security perspective. The company is thus looking forward to completing this deal till March 2018. Accordingly, the company wants to take an advantage of start of Japanese new year so that it will be booted from the Tokyo Stock Exchange.

Source: Techcrunch

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