Beijing Finally Okays Toshiba’s Chip Unit Sale to Bain Consortium

Published By : 01 Jun 2018 | Published By : QYRESEARCH

The scandal-hit Japanese firm Toshiba is finally flush with cash thanks to the sale of its memory-chip business. However, large investor payouts in the form of dividends and stock buybacks seem to be a distant prospect at this point in time.

Keen on avoiding being kicked out of the stock market, the company raised 600 billion yen through hedge funds in December. It has now racked up US$18 billion through the sale of its chip unit via a consortium which has been led by private equity firm Bain Capital.

Protracted Scrutiny by Chinese Authorities Delayed Deal

The deal was supposed to be completed by the end of March initially. However, on account of protracted review by the antitrust authorities in China it got delayed. It was finally okayed by China last month, i.e. April.

A year back the Bain consortium, won a protracted and closely contested battle for Toshiba Memory, which comes second when it comes to manufacturing of NAND chips.  

Toshiba had decided to hive off the business since it incurred billions of dollars in cost overruns at the Westinghouse nuclear unit which had plummeted into crisis.

Apple Inc, Dell Technologies, South Korean chipmaker SK Hynix, and Kingston Technology are a part of the consortium.

With the approval of Bain consortium by Beijing, it is now widely predicted that China would also give a nod to the proposed US$44 billion takeover of rival NXP Semiconductors by Qualcomm.

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