Toshiba has finally announced the sale of its memory chip unit for $18bn to a consortium led by Bain Capital.
After eight months of bid battling, the chipmaker has now signed a deal to sell its memory chip unit. Rumours of Apple being part of the investment materialised, as well as Dell also being among the technology companies included in the Bain Capital-led consortium.
Other investors in the group include Japanese Hoya, South Korea’s SK Hynix, Kingston Technology Corporation and Seagate Technology.
The consortium buying Toshiba’s Memory Corporation (TMC) will be known as ‘Pangea’, formed and controlled by Bain Capital. Terms and conditions to the sale have been outlined by Toshiba in a share purpose agreement (SPA).
Toshiba’s SPA brings a set of conditions, stating that the Japanese companies among the investors will hold over 50% of the common stock in the ‘special company’, Pangea. In comparison, US investors of the memory chip business will not hold any voter rights or common stock.
Chipmaker Company Toshiba said: “The US investors will not acquire any common stock or voting rights over TMC. In addition, SK Hynix will be firewalled from accessing TMC proprietary information and will not be permitted to own more than 15% of the voting rights for a period of 10 years.”
Following the transfer of shares to Pangea, Bain Capital and Toshiba has said the consortium and TMC management will “lead TMC’s business operations to secure continuous growth”.
Although the deal has already been confirmed, regulatory requirements are still necessary to ensure the agreement doesn’t breach any rules or national security.
Toshiba is still in an on-going legal battle with joint venture Western Digital, who wants to stop the sale due to claims it breaches partnership agreements.
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Regarding the legal dispute, Toshiba has said: “The SPA contemplates that the sale of TMC will be consummated even if the Joint Venture interests have not been transferred to TMC prior to the closing, unless the transfer of TMC’s stock itself is blocked by an injunctive order.”
Upon agreement on the terms between Toshiba and Pangea, the memory chip company aims to seal the deal by the end of March 2018.