Toshiba says sells chip unit to Bain Capital for around $18 bn

TOKYO, Sept 20, (AFP): Toshiba said Wednesday it would sell its memory chip business to a group led by US investor Bain Capital, in a deal worth around $18 billion and seen as crucial to keeping the Japanese conglomerate afloat.

The sale to the consortium – which includes US tech giants Apple and Dell as well as South Korean chipmaker SK Hynix – caps a monthslong saga that saw heated courtroom battles, rival bids and the near-delisting of one of Japan’s best-known firms.

“At the board meeting held today, our company has decided to conclude a contract to transfer stocks of Toshiba Memory to Pangea, a special purpose acquisition company formed by a consortium led by Bain Capital Private Equity,” Toshiba said in a Japanese-language statement.

The deal is worth two trillion yen ($18 billion), Toshiba said, adding that it also planned a reinvestment worth 350.5 billion yen ($3.1 billion) in Pangea.

Toshiba said it aimed to complete the sale by March.

The announcement was a milestone in a protracted effort to sell the lucrative chip unit to revive the group’s overall financial health.

Last week Toshiba said it had signed a memorandum of understanding with the Bain group as the leading candidate.

But at the time, the Japanese giant had held open the possibility it could still ink a deal with rival bidders Western Digital, Toshiba’s US-based chip factory partner, or Taiwan’s Hon Hai Precision, better known as Foxconn.

Toshiba and Western Digital were embroiled in a heated legal dispute over the sale, with the Japanese firm suing its US partner for trying to block a deal.

Toshiba is the world’s number two chipmaker behind Samsung and the division’s products are found in many smartphones and electronic gadgets.