Western Digital to win Toshiba chip unit bidding war

Western Digital looks like it has won the bidding war for Toshiba’s memory chip unit. After months of negotiations, legal battles and boardroom meetings, Toshiba has picked the US company, according to Japanese news outlet Nikkan Kogyo.

According to the report, Toshiba has accepted an $18.3 billion bid from its former partner. The official announcement is expected to be made on September 20 after a scheduled Toshiba board meeting. Nikkan Kogyo said the two companies are in the final stages of talks to work out how big a stake Western Digital will eventually have in the chip unit.

Just yesterday, it looked like Western Digital were set to miss out on the deal, after a consortium led by Bain submitted a $22 billion bid of its own. The offer by the consortium, which is led by the U.S. private equity group and South Korean chipmaker SK Hynix as well as Japanese state-backed investors, was higher than an initial offer of around $18 billion, according to Reuters. However, Western Digital appear to have got past their stumbling block and the deal now looks set to go through.

Failure to clinch a deal soon, could result in Toshiba being delisted in March, with a six month window needed to get its finances in order. All of this comes in an effort to make up the $18 billion it needs pay off huge loans it has accrued. The nature of the sale has seen the Japanese government heavily involved, with emphasis being placed on keeping the firm within the country.

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 has led to massive scandal and loses for its parent company. Last month Westinghouse filed for a Chapter 11 bankruptcy and Toshiba is attempting to split from the company. Since revealing its financial turmoil a number of investors have shown an interest in Toshiba’s technology businesses.

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