Daily Management Review

Toshiba awards Bain-led consortium the rights to purchase its NAND chip business


09/20/2017


Despite the appearance of finality to the matter, there still lurks an element of uncertainty given Western Digital Corp’s earlier position on the matter.



As per three sources with knowledge of the talks, Toshiba Corp has selected U.S. private equity firm Bain Capital to buy its NAND chip business.
Despite this decision, it is still unclear whether Toshiba’s joint venture partner Western Digital Corp, a rival suitor which has initiated legal action on the grounds that no deal is allowable without its consent, will allow this deal to go through.
According to sources, the Bain-led consortium has offered $22 billion for Toshiba’s NAND semiconductor business.
The consortium includes, Apple Inc, Dell Inc, Seagate Technology Plc, SK Hynix Inc and Kingston Technology.
As per Hideki Yasuda, an analyst at Ace Research Institute, the constituents of the consortium could spell trouble ahead.
“The large number of stakeholders could complicate decision-making and slow down key investment decisions,” said Yasuda while adding that the participation of Toshiba clients would also sap the ability of the chips business to negotiate competitively on pricing.
As per another source, the official announcement by Toshiba on the deal has got held up since it is still awaiting commitment letters from all members of Bain’s consortium.
While a representative from Bain was not immediately available for comment, Toshiba and SK Hynix declined to comment.
 
References:
http://uk.reuters.com







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