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Toshiba to sell memory chip to Bain for $18 billion

Toshiba to sell memory chip to Bain for $18 billion

Toshiba will sell its lucrative storage chip memory business to a consortium of buyers led by Bain Capital for $18 billion, Reuters reports.

According to news reports earlier in the day, Toshiba's board of directors chose to sell its chip-making unit to the consortium for about 2.4 trillion yen (US$21 billion).

But the California-based firm would not agree to limits to any future stake in the chip business that had been demanded by Toshiba, said one person briefed on the matter.

It has partnered with South Korea's SK Hynix Inc and brought in United States buyers of Toshiba chips such as Apple Inc and Dell Inc to bolster its bid.

The decision comes after board members also considered a revised offer made at the last minute by a group led by Western Digital Corp, which jointly invests in Toshiba's Yokkaichi flash memory plant.

The Toshiba announcement referred to a group with foreign companies, but did not cite SK Hynix.

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Sources declined to be identified as they were not authorised to speak about discussions on the sale.

With plans to devote over half of its memory production to 3D NAND flash by the end of next year, it has been thought that the acquisition of shares in Toshiba's chip business was part of SK Hynix's efforts to improve the competitiveness of its flash technology, helping the company shrink the gap with industry leaders like Samsung.

Toshiba shares are up 2.5% at midday Wednesday in Japan; in South Korea, SK Hynix is up 1%.

The Japan-based conglomerate is forced to unload the thriving business unit to fill a major hole in its finances caused by the bankruptcy of its US nuclear unit, Westinghouse. To complete the sale, Toshiba may have to overcome continued resistance from joint venture partner Western Digital. A spokeswoman for the latter told Reuters it had no immediate comment.

Following the signing of a memorandum of understanding on 13 September, Toshiba has apparently concluded a deal to sell its semiconductor business to Bain Capital for $18billion.


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