China’s OK of Toshiba deal taken as easing of trade rift

Chinese officials have approved Toshiba’s sale of a majority stake in its lucrative microchip unit to a U.S.-led group.

A lack of approval by Chinese regulators had held up the deal for months. The delay was widely seen as a sign from Beijing of the ways it could punish U.S. businesses if the Trump administration followed through on threats to impose tariffs on $150 billion in Chinese-made goods.

In a statement Thursday, Toshiba said it had received “all required antitrust approvals” for the deal with a consortium led by the U.S.

● investment firm Bain Capital. Bain confirmed in its own statement that Chinese authorities had approved the deal.

Chinese officials could not be reached for comment late Thursday, and the country’s official media and websites were silent on the matter. The reasons for the approval after the lengthy delay were not immediately clear.

The approval is likely to be viewed as a positive sign by the Trump administration, and it suggests the two countries are seeking ways to defuse tensions and reach a deal. A senior Chinese government official, Liu He, is in Washington for trade talks this week.

The approval of the Toshiba

deal came just days after the White House appeared to make its own peace offering to Beijing.

President Donald Trump, in a surprise tweet Sunday, said he had asked U. S. officials to find a way to help ZTE, a Chinese telecommunications company. Officials in Washington last month prohibited U.S. companies from selling much-needed technology to ZTE to punish the Chinese company for violating U.S. sanctions against selling goods made in the United States to Iran, North Korea and other countries. ZTE’s factories ground to a halt, spurring anger from Beijing.

China’s approval raises questions about another big deal before antitrust regulators: Qualcomm’s $44 billion purchase of NXP Semiconductors, a company based in

the Netherlands. That deal has also been long delayed pending Chinese approval, stirring speculation that Beijing was looking for ways to warn Washington of the potential consequences for a full-blown trade war.

The Toshiba deal’s approval will most likely be a big relief for the Japanese conglomerate, which once symbolized the country’s technological might but more recently has been scrambling to survive.

After months of difficult negotiations, Toshiba reached a deal in September to sell most of its lucrative microchip business to the Bain Capital group. The deal would give Toshiba $14 billion in cash it desperately needs after a bad bet on nuclear power. Toshiba officials could not be reached for comment late Thursday.

The Toshiba chip business

had been one of the company’s crown jewels. It makes a type of microchip, called NAND flash memory, that cellphones and digital devices use to store data. The business is profitable and attracted considerable interest from buyers.

Bain and Toshiba are not Chinese companies, but antitrust regulators in China still have considerable say over whether the deal goes through. Like American and European regulators, Chinese anti-monopoly officials can punish foreign companies through fines or other measures if they believe a deal beyond China’s borders will give the new business too much market power.

China has been flexing those relatively new regulatory muscles in recent years as it becomes a major consumer of the world’s goods.