Toshiba picks Bain consortium as memory chip buyer in $22 billion deal

The latest – and quite possibly, the final – twist in the highly contentious auction of Toshiba’s memory chip unit looks like drawing the affair to an end. According to Reuters, Toshiba has selected a consortium led by Bain Capital to buy its valuable chip unit. Turning its back on a proposed deal led by Western Digital, Toshiba is set to make around $22 billion from the sale.

The Bain-led consortium also consists of South Korean chipmaker SK Hynix, as well as tech giants Apple and Dell. The sale of the second largest NAND semiconductor producer has gone back and forth with a number of revised bids, lawsuits and negotiation disputes tacking place. Only last week, Western Digital looked in poll position to tie up a deal, with reports coming out of Japan that the deal was in the final stages. However that deal appears to have broken down as Western Digital failed to agree on limits to its future stake in the chip business demanded by Toshiba.

Western Digital have legal rights as a partner to disapprove any deal Toshiba strikes. This is likely to prevent the deal from going ahead straight away and may even result in a further legal case.

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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