Toshiba Set to Sell Memory-Chip Business to Consortium of Investors
The saga of Toshiba Corporation of Japan continues this week, with the company reporting today that its board of directors has voted to sell its memory-chip business – Toshiba Memory Corporation – to a consortium of investors that consists of Innovation Corporation of Japan, Bain Capital Private Equity, and the Development Bank of Japan.
According to Reuters, the consortium’s bid cleared Toshiba’s 2 trillion yen ($18 billion) minimum.
Toshiba, split off Toshiba Memory Corporation in April 2017 as a wholly owned subsidiary, and the sale of the memory business is said to be essential in order for Toshiba to cover billions of dollars of losses from its now-bankrupt U.S. nuclear unit Westinghouse Electric.
It said that the consortium of investors it selected “presented the best proposal, not only in terms of valuation, but also in respect to certainty of closing, retention of employees, and maintenance of sensitive technology within Japan (the consortium is based in either Japan or South Korea).” Both Foxconn and Apple had reportedly been seeking to purchase the memory-chip business.
Toshiba expects to complete the transaction by March 2018. However, last week as we reported, Western Digital filed a lawsuit in a California court seeking to block Toshiba from selling its memory-chip business. Western Digital is Toshiba’s manufacturing partner in the memory business; it’s requested a San Francisco state court to keep the sale on hold while it pursues arbitration. Reuters also reported that the consortium had told Toshiba that it needs to resolve this legal dispute with Western Digital before it will purchase the memory business. Western Digital CEO Steve Milligan had said that Toshiba was violating contractual rights and had left Western Digital no choice but to pursue legal action. There may be a possibility that Western Digital, which has also bid for the memory business, may end its lawsuit and perhaps join the consortium.
- June 2017: Western Digital Seeks to Block Toshiba’s Sale of Memory-Chip Business
- June 2017: Toshiba Determined to Sell Memory-Chip Business Despite Hurdles
- May 2017: Toshiba Not Reporting Audited Full-Year Financial Results at Shareholders’ Meeting
- May 2017: Report: Toshiba Corp May be Considering Bankruptcy
- April 2017: Toshiba Splitting Off Four of its Companies into Wholly Owned Subsidiaries
- April 2017: TABS CEO Reassures Clients in Wake of Toshiba Corp. Difficulties
- March 2017: Toshiba Approves Sale of Chip Business; Foxconn May be Bidder
- April 2017: Toshiba Reports $5.9 Billion Loss, Warns of Ability to Continue as Going Concern
- March 2017: Troubled Toshiba Fails to Submit Audited Third-Quarter Earnings