SK hynix's consortium tapped as preferred bidder for Toshiba
- Author: Zachary Reyes Jun 21, 2017,
Jun 21, 2017, 14:34
Toshiba is to sell its semiconductor business to a Japanese government-led consortium that also includes companies from Japan, the US and South Korea.
Toshiba said in a statement that "the consortium had presented the best proposal" in valuation terms as well as regards "certainty of closing [the deal], retention of employees, and maintenance of sensitive technology within Japan".
The other leading contender was United States chipmaker Broadcom, which made an offer of about 2.2 trillion yen, according to people with knowledge of the matter.
The consortium consists of the INCJ, Bain Capital Private Equity and the Development Bank of Japan. Moreover, Toshiba is favorable to the consortium because it will offer 2 trillion yen (US$17.94 billion or 20.45 trillion won) for the acquisition which meets the minimum price Toshiba wants. Simply put, Toshiba's memory business will be nationalized under Japanese government while Korean and U.S partners take a fringy part of the business, market experts said.
Asahi Shimbun said that it is still unclear whether Toshiba will select a preferred bidder on the 21st.
The numbers have yet to be finalised and are still subject to change, one of the sources said.
The three-country consortium is more likely to receive approval from the Japanese government as it is led by Japan's Ministry of Economy, Trade and Industry. Western Digital reiterated a June 15 statement by Chief Executive Steve Milligan in which he said that Toshiba was violating contractual rights and had left the US firm no choice but to pursue legal action.
A clean closure of the deal however is uncertain as Western Digital, Toshiba's long-time partner in NAND business which has filed for a court injunction to stop the sale, reiterated after the announcement that Toshiba was breaching their joint-venture agreement.