September 28 served as a milestone moment in Toshiba’s struggle to regain its financial footing, as it signed a legally binding agreement over the sale of its memory chip unit, Toshiba Memory Corporation (TMC), to a group led by Bain Capital.
The agreement acts to officially approve the sale of all shares of TMC to Pangea, a special purpose acquisition company that is controlled and led by Bain Capital. The final price tag for Toshiba’s prized chip unit is $17.7bn.
The deal comes after a protracted eight-month bidding war, which involved a string of legal disputes and complex network of rival contenders.
The deal between Toshiba and Pangea comes after a protracted eight-month bidding war, which involved a string of legal disputes
The Bain-led consortium includes US tech giants Apple and Dell, alongside South Korean chipmaker SK Hynix and lens manufacturer Hoya. Toshiba will also reinvest JPY 350.5bn ($3.1bn).
In total, US investors will contribute JPY 415.5bn ($3.69bn), but will not receive voting rights or common stock. After the transfer, more than half of stock in Pangea will be held by Japan-based companies, something that Toshiba said was set to continue into the future.
Once the shares are transferred, Bain Capital and the management at Toshiba’s chip unit will “lead TMC’s business operations to secure continuous growth”, according to a press release from Toshiba.
While the deal has now been confirmed, it will still be subject to approvals over competition and national security laws. It could also run into difficulties over Toshiba’s joint venture partner Western Digital, which is seeking an injunction to block the deal over a contract dispute.
If all goes to plan, however, the deal is expected to close officially by the end of March next year.
