Toshiba agrees $18b sale of chip unit to Bain consortium

The unit, Toshiba Memory Corporation (TMC), will be transferred to a special purpose vehicle set up by the consortium, which includes Innovation Network Corporation of Japan (INCJ) and Development Bank of Japan (DBJ). Strategic investors such as Apple, Dell, Kingston, and Seagate are also part of the group, according to previous statements by Bain. Toshiba will reinvest JPY351 billion in the vehicle, according to a statement.

The TMC sale was prompted by Toshiba’s deteriorating financial position after its Westinghouse nuclear power unit filed for bankruptcy earlier this year. The company has faced considerable pressure to finalize and win regulatory approval for the deal before the end of the financial year next March in order to secure funds to cover the Westinghouse losses and avoid delisting from the Tokyo Stock Exchange.

Toshiba’s attempts to secure the sale have been complicated by the resistance of Western Digital, whose SanDisk division operates a Nand flash manufacturing plant in Japan as a joint venture with Toshiba. It claims the JV agreement gives it veto power over any sale of TMC. Western Digital submitted its own bid for the business earlier this year and has also sought an injunction to block the sale until completion of an arbitration tribunal.

In a separate statement, Western Digital said that Toshiba had “acknowledged and validated SanDisk's legitimate consent rights on multiple occasions, and courts have entered multiple rulings in favor of protecting SanDisk's contractual rights.” The company also said it had initiated a new arbitration request to prevent Toshiba from making unilateral decisions regarding the JV’s operations.

Toshiba posted revised net sales of JPY4.87 trillion for the year ended March 2017, down from JPY5.15 billion the year before. Over the same period, the company’s net loss widened from JPY460 billion to JPY966 billion due to write-downs associated with Westinghouse.

The storage and electronic device solutions division, of which TMC is a part, generated sales of JPY1.7 trillion over the same period, up from JPY1.57 trillion the previous year. It was comfortably the best performing part of Toshiba’s business, with operating income of JPY247 billion, compared to a loss of JPY100 billion in 2015.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Buyouts
• Technology
• Japan
• Bain Capital Asia
• Innovation Network Corp. of Japan (INCJ)
• The Development Bank of Japan (DBJ)