Toshiba Expected to Reject Foxconn's $27B Bid For Memory Chip Unit Due To China Ties

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, Apr 12, 2017.

  1. MacRumors macrumors bot

    MacRumors

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    Early in March, Apple suppliers Foxconn and Taiwan Semiconductor Manufacturing Company announced their intention to bid for a stake in Toshiba's memory chip unit, which the company has put up for sale in an effort to offset a nearly $6 billion loss related to its overseas nuclear division. TSMC eventually dropped out of the race, leaving Hon Hai (Foxconn) as the highest bidder at nearly 3 trillion yen, or $27 billion.

    Today, people familiar with the sale speaking to Bloomberg said that Toshiba is expected to reject Foxconn's lofty bid, mainly because of likely opposition from both the Japanese and American governments if Foxconn were to win Toshiba's memory chip business. Taiwan-based Foxconn has deep ties with China due to its numerous, large iPhone production facilities being located in the country, and those ties are expected to sit unfavorably with Japanese officials watching the bids on Toshiba's memory chip unit.

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    According to insiders, Toshiba sees a sale to Foxconn as an inevitable drag through regulatory approvals and delays, and is now willing to give "serious consideration" to lower bids.
    Next in line is said to be a potential offer of 2 trillion yen made by Broadcom, but current bids are non-binding and could change at any time, with the next round of bidding coming in the middle of May. The Japanese government is said to be "keeping a close eye on the process" and is expected to protect its interests in any sale that occurs with Toshiba.
    Toshiba's likelihood in passing on Foxconn's bid is also said to be backed by a fear of the supplier's business methodology displayed during its acquisition of Sharp in 2016. In that process, the two companies originally agreed to a $6.2 billion takeover, but the final amount landed around $3.5 billion due to Foxconn's last minute bidding adjustment. Foxconn said the decision was based on discovering that Sharp had hundreds of billions of yen in "previously undisclosed liabilities," but the tactics are now said to make Toshiba "reluctant" to agree to Foxconn's bid.

    Toshiba is also looking closely at a bid made by South Korea's SK Hynix, but the winning bidder isn't expected to be announced until June, ahead of Toshiba's next shareholder meeting.

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    Article Link: Toshiba Expected to Reject Foxconn's $27B Bid For Memory Chip Unit Due To China Ties
     
  2. BlandUsername macrumors regular

    BlandUsername

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    #2
    Toshiba shot themselves in the foot. They should have excluded Foxconn from the get-go, but didn't to try and drive up the price. Good luck getting anywhere near that now that the official hammer has come down on them.
     
  3. Dave245 macrumors 601

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    #3
    I wonder if Apple will be bidding and could possibly win.
     
  4. Kabeyun macrumors 65816

    Kabeyun

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    #4
    Glad Foxconn is paying the price for playing bait and switch, if that's what they did. Prove yourself untrustworthy and hopefully people won't trust you. Not like we can rely on morals to regulate corporate behavior.

    I wonder if Apple's still in the running.
     
  5. vertical smile macrumors 68000

    vertical smile

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    #5
    Apple has ties to China too.
     
  6. macTW Suspended

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    #6
    "Racist... oh wait, they have justification? Uhm.... racist."

    Thankfully this forum is smarter than the average person and hopefully won't spout racism when there is a legitimate reason behind the preference.
     
  7. thisisnotmyname macrumors 65816

    thisisnotmyname

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    #7
    I've only seen one comment reference racism.
     
  8. tongxinshe macrumors 6502a

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    #8
    In the Foxconn-Sharp deal, isn't it Sharp that played the untrustworthy role?? Sharp hid ~3 billion debt. Foxconn simply subtracted that amount off its original bid after getting notified of that debt.
     
  9. Kabeyun macrumors 65816

    Kabeyun

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    #9
    I have no idea who disclosed what or what the agreement looked like. I just know that Foxconn subtracted a large number after they agreed on a price. Could be Sharp nefariously his debt, could also be Foxconn just didn't do their homework. That's why I wrote "if that's what they did".
     
  10. tongxinshe macrumors 6502a

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    #10
    You don't have to personally go through all of the details to know the answer, you only need to admit the basic commonsense, without prejudice.

    Foxconn publicly said the reason for the bid price adjustment is to subtract the big debt Sharp failed to disclose. If that public statement has any untrue factor, Sharp will definitely say it loudly to the public.
     

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