Toshiba to sell memory business for $18 billion

Allan Goodman
September 21, 2017

Toshiba is ready to sell its memory chip business to Bain Capital, the consortium that includes financial support from Apple, Dell, Hoya, and Hynix.

While seeking to take over the Japanese memory unit, WD claimed that Toshiba would infringe the U.S. firm's rights, as a partner for a joint venture in Japan, if the memory unit is sold to other companies. The company has been try to cope with billions of dollars in losses from its Westinghouse division, and made a decision to use its memory chip division to come up with new money.

The sale of the Toshiba memory chip unit should remove the looming threat. One consortium included Bain Capital, the Innovation Network Corporation of Japan and the Development Bank of Japan.

Bain was competing for the unit with rival bidding groups led by Western Digital, a joint venture partner of Toshiba, and Taiwan's Foxconn, also known as Hon Hai. The people declined to be identified as they were not authorized to speak on the matter. Toshiba has agreed to sell the business to a group of buyers led by Bain Capital instead of the Western Digital helmed consortium. Turning its back on a proposed deal led by Western Digital, Toshiba is set to make around $22 billion from the sale.

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"The large number of stakeholders could complicate decision-making and slow down key investment decisions", he said, adding that the participation of Toshiba clients would also sap the ability of the chips business to negotiate competitively on pricing.

After struggling due to a financial crunch caused by its now-bankrupt United States nuclear arm Westinghouse Electric, the Japanese chipmaker put its memory chip unit up for sale early this year.

"Our goal all along has been to reach a mutually beneficial outcome that addresses all issues for Toshiba and its stakeholders, and most importantly, ensures the longevity and continued success of the JVs", Western Digital said in a statement.

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