Toshiba set to sell its chip business to Bain-led consortium for $18 billion

Toshiba, the semiconductor giant, officially agreed to an $18 billion sale of its NAND memory chip business to a consortium led by Bain Capital, which includes Apple among its backers. Toshiba’s board has now given its approval to the sale after rejecting rival offers by KKR and two other Japanese funds. The company is keen to sell its TMC (Toshiba Memory Corporation) business to offset losses from its bankrupted Westinghouse nuclear business which it fears may cause it to be delisted from the Tokyo stock exchange next year. Beyond Bain, the bid is backed by Japanese medical devices firm Hoya, chip firm SK Hynix and U.S. firms Apple, Kingston, Seagate and Dell.

The consortium agreed to give Japanese firms Toshiba and Hoya more than 50 percent of voting power, to satisfy government concerns, while SK Hynix will be “firewalled” from accessing IP or other competitive information on the TMC business. Though it still requires anti-trust approval and the green light from a Japanese security perspective, there’s also an ongoing litigation between Toshiba and Western Digital to contend with. Western Digital, which works with TMC via its SanDisk business, objected to rival chip firms and customers taking ownership of TMC because it would ‘weaken’ the business. It initially demanded the right to veto any deal and later joined an unsuccessful bid for TMC.