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Toshiba weighs memory bid from alliance of Japan, US, South Korea

  • June 21, 2017
  • , Nikkei
  • English Press

TOKYO — Toshiba directors will consider Wednesday whether to give preferential negotiation rights to a Japan-backed alliance that brings together U.S. equity fund Bain Capital and South Korean’s SK Hynix seeking to buy the troubled industrial conglomerate’s flash memory unit.


The joint bid apparently exceeds 2 trillion yen ($17.9 billion), Toshiba’s asking price for its recently spun-off memory chip business. The situation remains fluid, however, with Toshiba chipmaking partner Western Digital having launched a legal challenge to a sale that it opposes.


Under the proposal to be weighed by Toshiba’s board, Bain Capital would set up a special-purpose company for the Toshiba Memory acquisition. The government-backed Innovation Network Corp. of Japan and the Development Bank of Japan also would invest in this vehicle, leaving Japanese investors with a majority stake in the unit. Shipmaker SK Hynix looks to join the alliance as well, possibly as a creditor.

Toshiba seeks to complete the sale by March to avoid two straight years of negative shareholder equity, which would trigger its delisting from the Tokyo Stock Exchange. Other bidders for Toshiba Memory include U.S. chipmaker Broadcom and Taiwan’s Hon Hai Precision Industry, the leading assembler of Apple devices.


Toshiba has said it will choose a buyer this month, but Western Digital’s opposition to the sale has thrown up an unexpected roadblock. The U.S. hard-drive maker partners with Toshiba on flash memory production in Yokkaichi, Japan.

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