Toshiba Signs $17.7 Billion Deal to Sell Memory Chip Unit to Bain-Apple Group

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  1. MacRumors macrumors bot

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    After lengthy negotiations, Toshiba this morning officially agreed to sell its lucrative memory chip unit to a global consortium that includes Apple, in a deal reportedly worth $17.7 billion (via The Wall Street Journal).

    Toshiba said the legally binding agreement ensures the chip unit will remain a Toshiba affiliate even after it has become the property of the Bain Capital-led group, which includes Apple, Dell, Seagate, Hoya, and SK Hynix.

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    Toshiba and Bain want to get the deal done by the end of March, despite ongoing litigation with Western Digital, which jointly operates the memory business with Toshiba. Western Digital claims it has the right to vote on the sale. Another hurdle is receiving antitrust clearance, which could take six months or longer, according to WSJ.

    Toshiba originally announced it would sell its NAND flash memory unit in January 2017 to raise funds to cover huge losses associated with its U.S. nuclear subsidiary, Westinghouse. Toshiba wants to close the deal to raise the cash by March so it can remain listed on the Tokyo Stock Exchange.

    Several companies, including TSMC, Foxconn, Amazon, Google, Broadcom, and a range of private equity firms entered bids this year in an effort to get a piece of the memory chip unit.

    In a statement given to Reuters on Thursday, SK Hynix said the Bain-led group will hold 49.9 percent of the voting rights in the chip unit, while Toshiba will hold 40.2 percent and Japan's Hoya Corp will own 9.9 percent. Apple, Dell, Seagate, and Kingston Technology will invest in the form of non-convertible preferred shares, it said.

    SK Hynix also revealed it will invest 395 billion yen ($3.5 billion) in the unit. Other companies declined to comment, but individual investments are believed to be 350.5 billion yen ($3.11 billion) from Toshiba, 212 billion yen ($1.88 billion) from Bain, and a combined 415.5 billion yen ($3.68 billion) from Apple, Dell, Kingston, and Seagate.

    Apple has been interested in the memory chip unit because NAND flash is an essential component of its iPhones and iPads. Only a handful of companies make the chips and the dominant player is Samsung, Apple's biggest rival in the smartphone industry.

    Article Link: Toshiba Signs $17.7 Billion Deal to Sell Memory Chip Unit to Bain-Apple Group
     
  2. Peace macrumors Core

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  3. unibility macrumors 6502a

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  4. budselectjr macrumors 6502a

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  5. macs4nw macrumors 601

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    They can all sign what they want, but this could still end up becoming a messy contested affair with WD's claims, and not to mention a pending, protracted and cumbersome antitrust clearance process.

    If Toshiba prevails in the end, the Apple, Dell, Kingston, and Seagate consortium could end up with a majority stake in the newly formed memory chip unit.
     
  6. jayducharme macrumors 68040

    jayducharme

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    I’m curious as to why, if this particular unit is profitable, they would sell it. If it’s making them money, why not keep it? Also, I didn’t realize that Toshiba owned Westinghouse.
     
  7. OllyW Moderator

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    It explains why they are selling it in the article...

     
  8. 69Mustang macrumors 603

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    It's not like they really had a choice. Also, they are keeping it. They are just selling a portion of the unit to pay that Westinghouse debt.
     
  9. 69Mustang macrumors 603

    69Mustang

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  10. DipDog3 macrumors 65816

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    Because Westinghouse burned through billions of dollars building a nuclear reactor in South Carolina that was subsequently canceled after the estimated cost went from $12 to $25 Billion.
     
  11. FX120 macrumors 65816

    FX120

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    Buy Lam Research and Applied Materials stock...
     
  12. Michaelgtrusa macrumors 604

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    In the last article it states that Toshiba will keep a large percentage on the unit.
     

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