Toshiba to sell prized chip unit to Japan-US-South Korean syndicate

Toshiba to sell prized chip unit to Japan-US-South Korean syndicate

Toshiba to sell prized chip unit to Japan-US-South Korean syndicate

Japanese conglomerate Toshiba has reportedly chose to sell its memory-chip business to a bidding group which includes South Korean chipmaker SK Hynix and US investment bank Bain Capital.

After months of speculation as to who Toshiba will sell its memory chip unit to it is expected to make a formal announcement later today.

Amid ongoing financial woes, the embattled Japanese company has been seeking to sell off its prized memory chip business to one of three groups of bidders.

The Bain consortium is led by an investment of at least $3 billion by Apple Inc., Dell Inc., Seagate, Kingston and the South Korean chipmaker SK Hynix.

Toshiba on September 13 signed a memorandum of understanding (MOU) with the Bain Capital-led consortium for the sale of its memory chip business.

The latest - and quite possibly, the final - twist in the highly contentious auction of Toshiba's memory chip unit looks like drawing the affair to an end.

Bain Capital and SK Hynix, as part of the accepted bid, will reportedly bear the brunt of the legal costs associated with the dispute, while a settlement with Western Digital needs to be made quickly or the deal announced Wednesday could be blocked, the sources said.

The group needs the proceeds to plug a huge hole in its shareholder equity created by massive writedowns on its U.S. nuclear business.

The Bain-led offer for the world's No. 2 producer of NAND semiconductors is worth some $22 billion, sources have said.

The Bain consortium has since revised the offer, aiming to get around that problem by inviting the state-backed investors - the Innovation Network Corp of Japan (INCJ) and the Development Bank of Japan - to invest in the business only after any arbitration with Western Digital is settled. A Western Digital spokesman declined comment.

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