Toshiba Corp. signed a final agreement to sell its flash memory chip business to a group led by Bain Capital for about 2 trillion yen ($18 billion). Primary technology companies Dell Inc., Japan’s Hoya Corp., Apple Inc., SK Hynix Inc. involved in Bain Capital, while as per company statement Toshiba itself will maintain a stake. Depending on capital expenditures the total value of the transaction may change. The main focus of deal to keeping control of an important business in Japan, at the same time securing the funding needed to help Toshiba repair its damaged balance sheet.
The sale has been notify by fierce tensions between Western Digital Corp., its partner in the chips business and Toshiba. Because of their joint ventures, the U.S. company has argued it should have veto rights in any sale.To satisfy government concerns, the consortium agreed to give Japanese firms Toshiba and Hoya more than 50 percent of voting power.
Bain called a press conference at Tokyo’s upscale Palace Hotel – “We thought we could call for the briefing first and get everyone’s agreement in the meantime, but couldn’t,” said Yuji Sugimoto, head of Bain Capital in Japan. “From the business point of view, please rest assured that all of the parties are in agreement.”
Toshiba is under burden to raise money by March to pay for billions of dollars in losses in its U.S. nuclear business. The deal to close by March 31, expected by Toshiba.To cover up its losses Toshiba need a successful deal.