Toshiba inks $18-bn deal to sell chip arm
Toshiba signed a final agreement to sell its flash memory chip business to a group led by Bain Capital for about 2 trillion yen ($18 billion), moving a step closer to completing the deal after months of contentious negotiations.
The Bain consortium includes major technology players Apple, Dell, SK Hynix and Japan’s Hoya, while Toshiba itself will maintain a stake, the company said in a statement Thursday. The total value of the transaction may change depending on capital expenditures. The deal is aimed at keeping control of an important business in Japan, while securing the funding needed to help Toshiba repair its damaged balance sheet.
The sale has been marked by fierce tensions between Toshiba and Western Digital, its partner in the chips business. The US company has argued it should have veto rights in any sale because of their joint ventures and tried to buy the business itself. Toshiba disputes its partner has such rights and solicited offers from a range of bidders, including Western Digital’s rivals. The US company has already vowed to fight the sale to Bain through arbitration filings in the US.
True to the deal’s tumultuous nature, Bain called a press conference at Tokyo’s upscale Palace Hotel Thursday evening -only to cancel it as journalists arrived. The firm’s Japan chief explained its partners hadn’t all signed off on the event.
“We thought we could call for the briefing first and get everyone’s agreement in the meantime, but couldn’t,” said Yuji Sugimoto, head of Bain Capital in Japan. “From the business point of view, please rest assured that all of the parties are in agreement.”