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October 5, 2017updated 19 Jul 2022 12:27pm

Bain Capital outlines plan to list Toshiba chip unit

The process could be hindered by geopolitical tensions between China and South Korea, with SK Hynix a part of the consortium.

By Tom Ball

Private equity firm Bain Capital has detailed a plan to list the Toshiba chip unit on the Tokyo Stock Exchange in three years’ time or under.

Bain Capital headed up a consortium that made an $18 billion acquisition of the chip unit, and it is now poised to make a return on the investment.

The three year projection has been made because the consortium requires an antitrust approval, for which it has filed for in China.

Unhindered this process could require nine months, but due to the presence of SK Hynix in the consortium, the turbulent geopolitical relationship between China and South Korea could further complicate the process.

In addition to gaining this crucial clearance, the United States, the EU and Japan would also need to provide antitrust approval for the listing to go ahead. Other organisations that have joined Bain Capital in the consortium include Dell, Apple Inc and Kingston Technology.

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It took the Bain Capital-led consortium eight months of negotiations to finally seal a deal for the Toshiba chip unit, and some strict terms were included. The Japanese companies within the consortium will be in control of over half of the common stock, while in addition to this, the US will not hold any voter rights over this stock.

A consortium that included Western Digital had also been in energetic pursuit of the chip business, but it made slow process due to concerns that the involvement of Western Digital would lead to antitrust reviews due to its stake in the business.

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The offer from the Bain Capital-led consortium also waylaid the goals of Western Digital’s acquisition aspirations, with an offer of $18.3 billion beating the $17.4 billion that was on the table previously.

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