Toshiba to sell chip unit to Japan-US-South Korea group

Toshiba to sell chip unit to Japan-US-South Korea group

Toshiba to sell chip unit to Japan-US-South Korea group

That had turned the tide away from the bid led by USA private equity firm Bain Capital LP and SK Hynix Inc.

The board has made its decision for the Bain group, three sources told the news service, and they said the company would announce it later Wednesday.

According to news reports earlier in the day, Toshiba's board of directors chose to sell its chip-making unit to the consortium for about 2.4 trillion yen (US$21 billion).

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Toshiba is rushing to sell Toshiba Memory to make up for the huge losses stemming from its now-bankrupt US nuclear unit by next March and avoid reporting negative net worth for a second straight year that would see it face a forced delisting from the Tokyo Stock Exchange.

After struggling due to a financial crunch caused by its now-bankrupt United States nuclear arm Westinghouse Electric, the Japanese chipmaker put its memory chip unit up for sale early this year. Turning its back on a proposed deal led by Western Digital, Toshiba is set to make around $22 billion from the sale. Bain Capital didn't immediately respond to a request for comment.

Western Digital's refusal to relinquish future ownership rights in the chip business has hindered a sale, while the rival Hynix-Bain bid was hampered by legal challenges from Western Digital, made on grounds that it would infringe Western Digital's rights in the venture with Toshiba in central Japan.

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The consortium has put forward an acquisition offer of some 2.4 trillion yen, including funds for equipment investment.

Failure to clinch a deal soon, could result in Toshiba being delisted in March, with a six month window needed to get its finances in order.

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