mulling 50 bil. yen investment in Toshiba chip unit
Apple Inc. is considering joining a Western Digital Corp. group
bidding for Toshiba Corp.'s chip unit and investing around 50 billion
yen ($460 million), sources close to the matter said Friday.
Western Digital, Toshiba's chip business partner, has approached
Apple as the U.S. data storage company does not plan to invest in
Toshiba Memory Corp. initially to help speed up antitrust reviews,
while demanding an expanded role in the chip plant it jointly
operates with Toshiba in central Japan.
Flash memory chips are a key component of smartphones. Apple's
share of control over Toshiba Memory is still being discussed by the
consortium members to avoid antitrust issues, the sources said.
The Western Digital consortium eyes listing Toshiba Memory in
the future and the U.S. company is planning to take voting rights of
a little less than 16 percent after the chip unit goes public,
sources have said.
The core members of the Western Digital group, which includes
the state-backed Innovation Network Corp. of Japan and Development
Bank of Japan as well as U.S. fund Kohlberg Kravis Roberts & Co.,
have offered 1.9 to 2 trillion yen for Toshiba Memory.
Western Digital initially offered to buy 150 billion yen of
Toshiba Memory's convertible bonds, sources close to the negotiations
Western Digital and Toshiba have been trying to find common
ground in their negotiations for Toshiba Memory after a bitter feud
over whether the Japanese company needs its U.S. partner's consent
for the sale of the chip unit. Toshiba remains in talks with two
other consortia -- a Japan-U.S.-South Korean group and another group
organized by Taiwanese tech giant Hon Hai Precision Industry Co.
Apple has been approached by all three consortia bidding for
The INCJ and the DBJ are also part of the Japan-U.S.-South
Korean group that includes U.S. investment fund Bain Capital and
South Korean chipmaker SK Hynix Inc.
Toshiba is aiming to pick a buyer on Wednesday when it will hold
a board meeting and report the results at an extraordinary
shareholders meeting scheduled for Oct. 24.
Toshiba needs to quickly sell the chip business to cover huge
losses stemming from its now-bankrupt former U.S. nuclear unit
Westinghouse Electric Co. The company will be delisted from the Tokyo
Stock Exchange unless it eliminates its negative net worth by next
Toshiba is running out of time as it would typically take more
than six months to receive clearance for the chip unit deal from
regulators in major countries. (Sept. 8)