Toshiba’s memory chip sale to consortium wins OK

Japanese electronics company Toshiba Corp. said Thursday the sale of its computer memory chip business to a consortium led by Bain Capital Private Equity has cleared all antitrust regulatory approval, including one it was awaiting from China.

That means the deal, valued at 2 trillion yen ($18 billion), can now close by June 1, Tokyo-based Toshiba said.

Toshiba, which also has railroad and nuclear energy units, was counting on the deal for a turnaround.

Its U.S. nuclear operations at Westinghouse Electric Co. filed for bankruptcy last year. Toshiba’s massive red ink in recent years began with reactors it has been building in the U.S. which are still unfinished, partly because of beefed-up safety regulations following the 2011 Fukushima nuclear disaster in northeastern Japan.

Initially, Western Digital opposed the sale of its NAND flash-memory SanDisk joint venture with Toshiba, starting lawsuits.

Toshiba first announced the sale of its chip business, called Toshiba Memory Corp., in September last year. The dispute with Western Digital was settled late last year, with it and Toshiba Memory Corp. agreeing to continue their collaboration in flash memory.

Toshiba Memory will be acquired by a special company called Pangea formed and controlled by Bain’s consortium, which includes South Korean and U.S. companies but comprises mostly Japanese investors.

Bain welcomed the approval from Chinese authorities.

“All antitrust approvals have now been received and we are looking forward to closing this investment,” it said, stressing that it hopes its chip business will grow.

“This consortium of companies brings together leading industry players who will invest significant resources and work together to help ensure the semiconductor industry remains highly competitive and can respond to fast-changing demands,” it said.

Toshiba’s financial woes were so serious that auditors refused to sign off on its financial statements last year.

Toshiba reported earlier this week that it returned to profit for the fiscal year through March, a reversal of the red ink racked up the previous fiscal year. The results assumed the completion of the chip sale by the end of June.