Toshiba Mulls Giving Up On USD18.6 Billion Chip Unit Sale Amid Lengthy China Probe

Toshiba Mulls Giving Up On USD18.6 Billion Chip Unit Sale Amid Lengthy China Probe

Xu Wei

Date: Tue, 04/24/2018 - 11:26 / source:Yicai
Toshiba Mulls Giving Up On USD18.6 Billion Chip Unit Sale Amid Lengthy China Probe
Toshiba Mulls Giving Up On USD18.6 Billion Chip Unit Sale Amid Lengthy China Probe

(Yicai Global) April 24 -- Japanese electronics manufacturer Toshiba Corp. is considering whether to cancel its sale of semiconductor unit Toshiba Memory Corp. because of China’s prolonged anti-monopoly investigation into the USD18.6 billion deal, Kyodo News reported.

Toshiba agreed last September to sell its memory chip business to a US-Japan-South Korea consortium led by US-based private-equity firm Bain Capital. Chinese regulators have carried out a long probe into the arrangement while waiting for Bain Capital to get all the regulatory approvals and re-submit its application by the end of May. The deadline for the sale is May 1.

One of the reasons for the lengthy investigation may be the ongoing China-US trade tiff along with US claims that some Chinese chipmakers’ are using espionage to gain access to sensitive technologies.

The sale could bring JPY1 trillion (USD9.19 billion) to the cash-strapped company, which would be used as capital for Toshiba’s mergers and acquisitions strategy. But as the Tokyo-based company emerges from insolvency, some foreign funds are opposed to the chip unit’s sale. If the deal falls through, however, Toshiba would face the problem of needing to secure large-scale financing for Toshiba Memory.

Editors: Emmi Laine, William Clegg

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Keywords: TOSHIBA, US, M&A