Toshiba ends months of speculation, sells chip unit to Bain-led group for $18b

FILE PHOTO: The logo of Toshiba Corp is seen behind a traffic signal at its headquarters in Tokyo, Japan January 27, 2017. REUTERS/Toru Hanai/File Photo

Japan’s Toshiba Corp. said on Thursday it had signed an $18 billion deal to sell its chip unit to a consortium led by Bain Capital LP, overcoming a key—albeit not its last—hurdle as it scrambles for funds to stave off a potential delisting.

The sale of the unit—the world’s second biggest producer of NAND chips—was agreed last week but the signing was delayed because consortium member Apple Inc. demanded new terms on chip supply in return for funding, sources familiar with the matter have said.

Bain’s consortium also includes South Korean chipmaker SK Hynix, as well as Dell Inc, Seagate Technology Plc and Kingston Technology.

Pressure from the Japanese government, changing alliances among suitors and a slew of revised bids has drawn out the auction over nine months—heightening the risk that the deal may not close before the end of Japan’s financial year in March as regulatory reviews usually take at least six months.

If the deal does not close before then, Toshiba—hurt by liabilities at is now bankrupt nuclear unit Westinghouse—is likely to end a second consecutive year in negative net worth, putting pressure on the Tokyo Stock Exchange to strip it of its listing status.

The sale also faces legal challenges from Western Digital, Toshiba’s chip venture partner and rejected suitor, which is seeking an injunction to block any deal that does not have its consent.

Western Digital, one of world’s leading makers of hard disk drives, paid some $16 billion last year to acquire SanDisk, Toshiba’s chip joint venture partner since 2000. It sees chips as a key pillar of growth and is desperate to keep the business out of the hands of rival chipmakers.

Also Read:

Apple, Bain Capital said to agree on terms for Toshiba’s chip unit bid

Toshiba said to aim for chip deal with Bain by Sept 20

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.