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Toshiba Signs ‘MOU’ With Bain & Apple Group For Chip Business

Toshiba has signed a non-binding memorandum of understanding (MOU) with a consortium led by Bain Capital – including Apple – for the sale of its memory chip business.

As the MOU is non-binding, Toshiba states it will “not eliminate the possibility of negotiations with other consortia” and continue discussions with other bidders.

The announcement has been to the disappointment of rival bidder, US-based chip maker Western Digital, who is also a joint venture partner in Toshiba’s chip making facilities:

Western Digital states it is “disappointed that Toshiba would take this action despite Western Digital’s tireless efforts to reach a resolution that is in the best interests of all stakeholders”, and it has ultimately sought to keep the success of its chip manufacturing joint venture with the Japanese company.

The Japanese based electronics manufacturer states the Bain-led consortium cam forward with a new proposal, and based on this it would “work to expedite” a completed sale by end of September.

The Bain-led consortium includes Californian-based Apple, several Japanese companies, and the provision of $5.5b of debt from Toshiba’s main lenders.

Sources state two govenernment-backed lenders, the Innovation Network Corporation of Japan and the Development Bank of Japan, are likelt to step in with financial investment once the legal disputes with rival bidder, Western Digital, are rectified. Toshiba, itself, is also said to be an investor in the sale.

Western Digital has further expressed its disappointment at Toshiba’s recent announcement, noting the to the SanDisk organisation:

“Furthermore, it is surprising that Toshiba would continue to pursue a transaction with a consortium led by Korea-based SK Hynix Inc. and Bain Capital Japan without SanDisk’s consent, as the language in the relevant JV agreements is unambiguous, and multiple courts have ruled in favor of protecting SanDisk’s contractual rights. We remain confident in our ability to protect our JV interests and consent rights.

Sources state Toshiba is under pressure from creditors to sign the deal as quickly as possible. Any delays risk the corporation delisiting from the Tokyp Stock Exchange in March next year.

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