Toshiba prefers US-Japan bidder for memory chip biz sale

Troubled Japanese conglomerate Toshiba on Wednesday announced it has selected a consortium led by the public-private Innovation Network Corporation of Japan as a preferred bidder for its prized memory chip business. The company is aiming to raise at least 2 trillion yen ($17.9 billion) through the sale to eliminate its negative net worth by next March to avoid delisting from the Tokyo Stock Exchange.

Toshiba Memory Corp is being sold by the company to raise the funds to plug a financial black hole caused by the Chapter 11 bankruptcy protection filing of U.S. nuclear power station builder Westinghouse. South Korean chipmaker SK Hynix Inc and the core banking unit of the Mitsubishi UFJ Financial Group Inc are set to provide financing.

The sale has received a lot of attention, with United States chipmaker Broadcom believed to have bid around $20bn for the unit with its partner Silver Lake, the USA private equity firm, while Western Digital and Taiwanese contract manufacturer Foxconn have also reportedly bid $18bn each for the company. The INCJ joined forces with US investor Bain Capital and the Development Bank of Japan for the bid.

The conglomerate wants to reach a definitive agreement on a buyer by its June 28 annual shareholders meeting.

Western Digital of the US, which has acquired some SanDisk chip operations, including a joint venture with Toshiba in Japan, has said it wants to be the bidder. Bain Capital Private Equity, based in Boston, is one of the world's leading investment firms. By contrast, SK Hynix is weak in NAND although strong in DRAM chips, which help electronic devices perform multiple tasks at once.

A source familiar with the matter has said Western Digital expects to get a ruling on its injunction request by mid-July.

  • Zachary Reyes