Toshiba, one of the long standing giants of the technology world and second largest supplier of smartphone memory, has finally put a price tag on its chip manufacturing business.
The Japanese company officially agreed to an $18 billion sale to a consortium led by Bain Capital which includes Apple and other backers.
TMC (Toshiba Memory Corporation), the branch behind memory chips production is up for sell in an attempt by Toshiba to cover up for loses suffered from its bankrupted Westinghouse nuclear business.
The reason behind this sale, is to help the Toshiba Company avoid being delisted from the Tokyo stock exchange next year if it doesn’t fix its financial mess.
The tech industry sees this as a very big move as it will affect the technological sphere itself in terms of the memory chip business. Apple which sees Samsung as big rival, isn’t sitting idly by and that’s why it’s involved in this historical deal.
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Samsung already is one of the biggest players in the memory industry and owns about 40 percent market share. Other competitors are joining the bid for TMC sale so as to maintain a healthy competitive market.
The sale was raised in early January this year but it has taken long to mature because of complications arising from big spenders like Google, Amazon and Foxconn.
Toshiba has now signed off an agreement with Pangea, a consortium led by Bain Capital to take the business on but at the same time leave it under Toshiba as a subsidiary. The bid is also backed by Japanese medical devices firm Hoya, a chip firm called SK Hynix and also U.S firms like Apple, Kingston, Seagate and Dell.
The agreement also allows Japanese firms Toshiba and Hoya to have more than 50 percent of the voting power since the government doesn’t feel comfortable with foreign firms having most of the stake in the business for security reasons.
Even though the deal has been agreed, it’s still in the process of being finalised and requires an anti-trust approval from the Japanese security agencies. The deal is expected to be completed by March 2018 which marks the start of the Japanese business year.
Author: Allan Bangirana
Allan Bangirana has a taste for all kinds of topics and usually writes about tech, entertainment, sports and community projects that make a difference in society.