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Toshiba flips back to favoring Western Digital group for chip unit sale

21 September, 2017, 01:00 | Author: Samuel Sharp
  • Toshiba said to have selected Bain-SK Hynix group to buy its memory business

That announcement marked the third time Toshiba had missed targets to sell the $18 billion business - the world's second-biggest producer of NAND memory chips.

In response to the MOU, Western Digital said it was surprised Toshiba would look to do a deal with Bain "without SanDisk's consent, as the language in the relevant JV agreements is unambiguous, and multiple courts have ruled in favor of protecting SanDisk's contractual rights".

Toshiba said it signed an agreement to sell its semiconductor unit to a consortium led by private equity firm Bain Capital for about $18 billion, the latest twist in a months-long saga over the Japanese conglomerate's effort to sell its prized NAND flash business to offset massive losses incurred by its US nuclear power subsidiary. In that case, three joint ventures between Toshiba and Western Digital would not be transferred to Bain at closing and the purchase price would be adjusted, the person said. Toshiba even filed a $1 billion lawsuit against Western Digital in retaliation for its attempts to prevent the deal from going through without its 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 people declined to be identified as they were not authorized to speak on the matter. -South Korean consortium led by USA private equity fund Bain Capital, informed sources said. The transaction includes Toshiba's $3.1 billion investment in the unit, as well as stakes from Apple Inc. Similarly, a bid led by equity group KKR and Western Digital did not progress.

After a board meeting, Toshiba made the final decision to sell Toshiba Memory Corp to the consortium that it had signed a memorandum with last week to speed up talks on the sale.

Bain Group revised its offer, by seeking financial support from Apple. It's not clear exactly how much capital Apple will ultimately contribute to the offer.

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