Toshiba Closes $18B Chip Unit Sale After Lengthy Reviews

Toshiba managed to close the sale of its chip unit to a consortium led by Bain Capital valued at approximately $18 billion, the Tokyo-based tech giant said Friday. The deal itself has been in the making for over a year now, with its initial completion target being set for the first quarter of 2018. China's antitrust watchdog insisted on a more in-depth review of the proposed sale, with its investigation delaying the transaction until now. The Toshiba Memory Corporation is officially being acquired by K.K. Pangea, a company owned by Bain Capital. Toshiba is investing around $3.2 billion back into Pangea as part of the transaction and will have a minority stake in the firm amounting to roughly 40.2-percent, with the overall deal hence seeing more than $21 billion exchanging hands.

Toshiba has been eager to offload its most profitable division so as to cover its accounting holes incurred by the bankruptcy of its nuclear business in the United States - Westinghouse Electric Company. Westinghouse filed for Chapter 11 bankruptcy in late March of 2017, leaving its parent with massive losses that it wasn't able to resolve with loans due to sanctions imposed on its business following a 2015 accounting scandal. The sale of TMC to Bain was still up in the air last month, with both parties confirming Beijing was yet to greenlight the deal at the time. The Bain-led consortium includes Apple, Dell, Kingston, Seagate, and SK Hynix, with the lattermost company being the main reason for the major antitrust scrutiny over the proposed transaction seeing how the deal allowed it to take out a direct rival and the world's second-largest manufacturer of NAND flash memory chips.

Bain and Toshiba initially reached an agreement nine months ago, with the new development ensuring a future for the struggling Japanese technology giant. Toshiba raised close to $5.5 billion from hedge funds in December while its prospects were less certain so as to avoid a stock exchange delisting. It's presently unclear whether any of its now-surplus cash will be used for generating returns for investors in the short term.

You May Like These
More Like This:
About the Author
2018/10/2018-10-23.jpg

Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
Android Headlines We Are Hiring Apply Now