Toshiba picks buyer for microchip arm
HONG KONG — As Toshiba, the embattled technology giant, battles for survival, it has turned to a group led by the Japanese government to buy its prized microchip business, although its plans still face a legal challenge by a U.S. business partner.
After weeks of jockeying among suitors, Toshiba said that it hoped to reach a formal sale agreement over its semiconductor business by next Wednesday, in the process raising much-needed cash. The company did not disclose terms of the potential deal, but analysts have estimated the value of the chip unit at about $20 billion.
By picking the Japanese consortium — its members include the Innovation Network Corp., a state-backed investment fund, as well as the U.S. buyout firm Bain Capital and the Development Bank of Japan — Toshiba is hoping to conclude a sale quickly. The company is hoping to reach a deal before its annual shareholder meeting.
Toshiba said in a statement that the group presented “the best proposal” in terms of its price, its promises to keep employees and its ability to keep sensitive technology within the country. The last of those was considered an important point, since a Chinese winner would have raised concerns by Japanese government officials about trade secrets seeping out of Japan.
Western Digital, a U.S. data storage company that owns part of a Toshiba semiconductor factory in Japan, has argued that it has a say in any deal. Western Digital, also a bidder for the memory business, asked a California state court to block any sale while also pursuing arbitration in the Paris-based International Court of Arbitration.