Tuesday, 17 October, 2017

Toshiba to sell chip unit to Japan-US-South Korea group

Toshiba Corp is seen on a printed circuit board in this Toshiba Corp is seen on a printed circuit board in this
Earnest Maxwell | 21 September, 2017, 00:34

Toshiba's board chose Bain over a group led by KKR & Co. and two state-backed funds, Innovation Network Corp. of Japan and Development Bank of Japan.

Toshiba quickly hit back at its joint venture partner, saying that "Western Digital persistently overstates its limited consent rights in public statements".

The South Korean company saw itself trailing behind its rivals such as Samsung Electronics, which was the first to mass produce 3D NAND flash chips, dominating the market past year.

While some had apparently expressed support for the plan, it was eventually rejected as many in the company could not overcome the distrust against the US firm following a bitter dispute between the two companies over the sale of the unit. 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. If not, however, Toshiba will hold on to three joint ventures it has with WD and revise Bain's purchase price accordingly. "Throughout our ongoing dialogue with Toshiba, we have remained flexible and have submitted numerous proposals that have specifically addressed all of Toshiba's concerns". The special goal entity making the acquisition will be called Pangea and receive about 600 billion yen in loans, the person said.

Reuters reported on Wednesday that the decision was made by Toshiba's board and would be announced later in the day.

The auction has gone through dizzying twists and turns.

U.S. private equity firm Bain Capital will lead the global consortium, along with other investors such as Apple, which has reportedly invested at least $3bn.

Sources declined to be identified as they were not authorised to speak about discussions on the sale.

Then Bain, revised its offer as well. The US buyout firm sought more financial support from Apple, asking for about $7 billion in capital, up from a previous agreement for about $3 billion, said a person familiar with the matter.

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