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$18 Billion Chip Unit Sale Of Toshiba To Bain Consortium Approved By China

$18 Billion Chip Unit Sale Of Toshiba To Bain Consortium Approved By China
Toshiba would not be able to sell off its most prized asset - its chip unit, after it announced that the China regulators have approved the $18 billion deal. The business unit has bene pledged ot be sold to a consortium led by U.S. private equity firm Bain Capital.
It has been about a year that this deal has been under regulatory consideration.
Toshiba Memory is the second largest producer of NAND chips in the world and the Chinese regulatory green light was the signal of p[Assange of the last hurdle and it now paves the way for the successful sale of the business.
Toshiba was plunged into severe crisis following billions of dollars in cost overruns at its Westinghouse nuclear unit. The company had neared bankruptcy before it decided to sell off its this asset. There had been a protracted battle between various companies for the business and the Bain consortium came out successful.  
There have been fears that China would delay taking decisions on major global chip deals because of the trade tension between China and United States. Xi Jinping confidante Liu He is currently in Washington to discuss the trade dispute.
“All antitrust approvals have now been received and we are looking forward to closing this investment,” Bain Capital said in a statement on Thursday.
“The Bain Capital-led consortium has committed to make significant capital investments to help develop and grow semiconductor technology.”
It expects the deal to be completed on June 1, Toshiba said in a small statement.
There was no comment made on the situation by a representative for China’s State Administration for Market Regulation because of his unawareness of the situation. there were also no comments available from any of the representatives for Bain.
The protracted review of the deal by the Chinese anti-trust authorities had raised speculation about the possibility of Toshiba cancelling the deal and seeking other ways to generate funds such as the floating of an IPO for the chip manufacturing unit.
The latest Toshiba chip unit sale approval has also raised hopes that the Chinese regulators might also grant the green signal for the $44 billion takeover deal of rival NXP Semiconductors by Qualcomm. However, media reports have suggested that no concrete breakthrough with respect ot the deal has so far been reached in Beijing.
Kingston Technology, Dell Technologies, Seagate Technology, Apple Inc. and South Korean chipmaker SK Hynix are part of the Bain’s consortium.
Under the deal, the money generated would be reinvested in the business and 50 per cent of the company would still be held by Toshiba and another Japanese company Hoya Corp which is also a manufacturer of parts for chip devices. This was one of the major wishes of the Japanese government.

Christopher J. Mitchell

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