Thursday, October 19, 2017

Toshiba sells $18bn memory business to private equity consortium that includes Apple and Dell

Western Digital and Foxconn miss out on multi-billion Dollar deal, as Toshiba announces it will continue to invest in flash memory.

Toshiba’s board has approved the sale of the $18bn Toshiba Memory business group to private equity consortium Bain Capital.

The decision comes eight months after the bidding process was initiated, with Western Digital being until recently pointed out as one of the top contenders to win the deal over the NAND flash memory chips which will give Bain Capital and its members an edge against rival Samsung.

Taiwan’s Foxconn was also another strong bidder until the end, according to sources.

Bain Capital is to use its special business unit created for acquisitions of this sort, K.K. Pangea, of which large corporations like Dell and Apple are part of.

Toshiba said it expects to close the deal by March 2018 and also announced it intends to make investments into Pangea worth up to $3.1bn, by acquiring Pangea’s common stock, convertible preferred stock and non-convertible preferred stock.

In addition, Innovation Network Corporation of Japan and the Development Bank of Japan, have also expressed their interest in investing in Pangea or the Toshiba Memory business at a later time, subject to satisfaction of certain conditions.

Dr Yasuo Naruke, senior executive VP of Toshiba, said: “The sale of Toshiba Memory Corporation must promote further growth of Toshiba Memory Corporation’s memory business, and return Toshiba group to positive equity.

“The memory business is highly time sensitive. It requires timely investments, accelerated product development, and the ability to quickly ramp-up large-scale production capacity.

“Toshiba Memory Corporation is now proceeding with a unilateral investment in manufacturing equipment for the Fab 6 clean room at its Yokkaichi Operations, and we aim to increase the output of 3D flash memory at Yokkaichi to approximately 90% of capacity in FY2018.

“Moving forward, we will continue to make timely investments to expand operations to meet growing market demand.”