Apple and Dell bid to acquire Toshiba's memory chip business

Ivan Schwartz
September 15, 2017

The statement from the embattled Japanese conglomerate comes a day after it said it was stepping up talks to sell the unit to a group led by Bain Capital and South Korean chipmaker SK Hynix (hxscl). Apple's money will help fill a gap left when state-backed Innovation Network Corp. of Japan and Development Bank of Japan made a decision to pull back from the Bain bid in the face of litigation from Western Digital.

Apple has a policy of not commenting on rumours and speculation.

The Japanese manufacturer has been troubled by big losses at Westinghouse Electric, its United States nuclear unit, which filed for bankruptcy in March. The iPhone maker's largest deal to date was the Beats acquisition in 2014. The deal could be worth $19 billion, but talk of numbers is still premature: An actual transaction is hardly closer than it was three months ago, when Toshiba.

Sources have said that discussions with Western Digital faltered as Toshiba, fearing its partner was angling to eventually take over the chip business, sought to limit the US firm's future stake in the unit. The effort was hampered by opposition from Western Digital, which solicited support from Japanese government officials and banks.

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Toshiba has insisted that Western Digital has overstated its rights over Toshiba Memory Corporation, which it acquired when it bought SanDisk for $19bn past year.

In the meantime, Yuji Sugimoto, managing director for Bain in Japan, worked to win Apple's support.

But later on it showed preference for the Bain-backed group, which is said to be discussing a $3bn stake in Toshiba's memory chip unit. As Toshiba has previously stated, the confidential agreements between SanDisk and Toshiba provide no reasonable basis for Western Digital's assertions that it is entitled to prevent a sale of TMC. Still, METI officials have opposed selling the business to Foxconn because of its ties to China, home to numerous company's factories.

In company news, Western Digital (WDC) declined on Wednesday, with shares of the data-storage device manufacturer dropping as much as 6% to a session low of $83.32 apiece after joint venture partner Toshiba overnight signed a non-binding agreement to sell its stake in their flash memory chip partnership to a rival consortium.

Other reports by GizPress

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