Toshiba Pessimistic About Prospects for $18 Billion Chip Deal
2018年5月8日 - 7:19PM
Dow Jones News
By Takashi Mochizuki and Kosaku Narioka
TOKYO-- Toshiba Corp. has mostly given up on an $18 billion sale
of its chip unit because its officials consider near-term Chinese
antitrust approval unlikely, leading them to accelerate a review of
alternatives, people involved in the matter said.
Toshiba reached a deal last September to sell its NAND
flash-memory unit to a group led by U.S. private-equity firm Bain
Capital, but the deal has been waiting for a nod from antitrust
regulators in China, one of the unit's top markets.
Chinese authorities have been generally uncommunicative about
the status of Toshiba's application in recent weeks, according to
people involved in the effort. The brushoff comes during a period
of heightened trade tension between China and the U.S., home to
Bain and others in the buyer consortium.
Chinese regulators gave an initial pessimistic review in April
to another chip deal involving a U.S. buyer, Qualcomm Inc.'s $44
billion purchase of NXP Semiconductors NV.
People involved in the potential transaction say that under
Chinese guidelines, regulators have until the end of this month to
screen the Toshiba submission and that a last-minute approval isn't
out of the question. Representatives of Toshiba and Bain said they
were waiting for China's decision.
Within Toshiba, senior officials are moving on to next steps.
"The deal is going nowhere, and the current scheme is dead," said a
person directly involved in Toshiba's effort.
China's Ministry of Commerce referred queries to the State
Administration for Market Regulation, which didn't immediately
respond to a request for comment. China is consolidating its three
antitrust regulators, including a unit at the Ministry of Commerce
that has been handling Toshiba's application, under the State
Administration for Market Regulation.
The Bain group got support from Toshiba customers including
Apple Inc. and Dell Technologies Inc., as well as fellow chip maker
SK Hynix Inc. of South Korea. Initially the parties hoped to close
the deal by the end of March and saw Chinese approval as likely
because they believed the deal would create a stronger competitor
against market leader Samsung Electronics Co.
Sentiment changed in March as trade tensions heated up. As of
April 1, Toshiba gained the right under its contract with Bain to
cancel the deal. The company fortified its financial position late
last year by raising more than $5 billion in new capital and now
faces less pressure to sell the chip unit to raise cash
quickly.
"We don't have any strong wishes that they should sell it," said
Dai-ichi Life Holdings Inc. President Seiji Inagaki in an
interview. His company is a lender to Toshiba and a
shareholder.
Toshiba executives have been reviewing alternatives such as
listing the chip unit on a stock exchange, changing the composition
of the buyer group or keeping the chip unit as a full part of
Toshiba, said ópeople involved in the discussions. Some investors
outside Japan have been urging the company to cancel the deal,
saying Bain's price--Yen2 trillion, or about $18 billion--was too
low.
None of the alternatives appears to have gained sway among
decision makers, in part because they are waiting for China to
explain its decision.
Although the chip unit contributes the vast majority of the
parent's profit, Toshiba's new chief executive officer, Nobuaki
Kurumatani, said in April that making the unit independent of
Toshiba was the best option because the parent didn't have the
financial backbone to support the business. Keeping the chip unit
competitive requires billions of dollars in investment each
year.
Flash memory is widely used in smartphones, computer servers and
other devices.
Xiao Xiao
contributed to this article.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com and
Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
May 08, 2018 06:04 ET (10:04 GMT)
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