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Toshiba finalizes deal to sell memory unit

Sept 29,2017
Toshiba said Thursday that it had signed off on a deal to sell its memory business to a global consortium that includes Korean chipmaker SK Hynix.

The Japanese tech giant earlier decided to start negotiations on selling its memory business to the consortium including participants from Korea, the United States and Japan.

The companies also include Bain Capital, Apple and Dell and a handful of other tech firms.

The deal is estimated to be worth 2 trillion yen ($17.6 billion).

Toshiba said it would sell all shares of the Toshiba Memory Corporation to Pangea, a special-purpose acquisition company formed by a Bain-led consortium.

The consortium, Toshiba and Hoya will each hold a 49.9 percent, 40.2 percent, and 9.9 percent stake.

“SK Hynix will be firewalled from accessing proprietary Toshiba Memory Corporation (TMC) information and will not be permitted to own more than 15 percent of the voting rights in Pangea or TMC for a period of 10 years as provided by the terms of the agreement,” Toshiba said in statement.

SK Hynix, Korea’s second-largest chipmaker, said Wednesday that its board of directors approved a plan to inject 4 trillion won ($3.5 billion) in the acquisition plan.

Of SK Hynix’s investment, 1.3 trillion won, or 129 billion yen, will be invested to buy Toshiba’s convertible bonds, which will help the firm secure a solid stake in Toshiba’s memory business.

SK Hynix also plans to chip in the remaining 2.7 trillion won, or 266 billion yen, in a fund established by Bain Capital as a limited partner, which can help the Korean company enjoy capital gains when the Toshiba business is listed.

“With Toshiba and Hoya’s investments, Japan-based companies will hold more than 50 percent of the common stocks in Pangea, and going forward Japan-based companies will continue to hold a majority,” Toshiba said. “After the TMC shares are transferred to Pangea, Bain Capital and TMC management will lead TMC’s business operations to secure continuous growth.”

Toshiba added the deal is anticipated to be completed on March 30, 2018.


Yonhap