Toshiba flips back to favoring Western Digital group for chip unit sale

Toshiba said to have selected Bain-SK Hynix group to buy its memory business

Toshiba said to have selected Bain-SK Hynix group to buy its memory business

The deal is costing US$18 billion and Toshiba expects to complete the process by March 31, 2018.

The Bain-led group was identified as a preferred bidder nearly three months ago, but the process has been delayed by lawsuits, government opposition and corporate indecision. The other bidder was Taiwan's Hon Hai Precision (Foxconn), but its bid faced an uphill battle as the Japanese government would prefer to choose a bidder with fewer ties to China. All because of the legal action launched by Toshiba's scorned JV partner in the chipmaking business, United States group Western Digital.

"The large number of stakeholders could complicate decision-making and slow down key investment decisions", he said, adding that the participation of Toshiba clients would also sap the ability of the chips business to negotiate competitively on pricing. It has been under pressure to sell from its biggest lenders, a trio of Japanese banks, according to The Financial Times.

Toshiba said the agreement assumed the deal would weather legal challenges raised by Western Digital. In that case, three joint ventures between Toshiba and Western Digital would not be transferred to Bain at closing and the purchase price would be adjusted, the person said. "Throughout our ongoing dialogue with Toshiba, we have remained flexible and have submitted numerous proposals that have specifically addressed all of Toshiba's concerns". Bain is thought to have support from Apple, Dell and SK Hynix, as well as other memory consumers. The special objective entity making the acquisition will be called Pangea and receive about 600 billion yen in loans, the person said.

Crude prices rise on signs of drop in global inventories
Gasoline inventories on the other hand declined by 2.1m b/d and those of distillates by another 5.7m b/d. ET (11:15 GMT), up 54 cents or about 1.08%, just off a four-month peak of $50.81 reached on Tuesday.

According to news reports earlier in the day, Toshiba's board of directors chose to sell its chip-making unit to the consortium for about 2.4 trillion yen (US$21 billion).

The auction has gone through dizzying twists and turns.

Following the signing of a memorandum of understanding on 13 September, Toshiba has apparently concluded a deal to sell its semiconductor business to Bain Capital for $18billion.

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