Toshiba sells Toshiba Memory Corp to Bain-led group for $18bn
Toshiba sells Toshiba Memory Corp to Bain-led group for $18bn
After an 8-month bidding war, Toshiba has officially agreed to the $1.8 Billion acquisition of their Memory Division, Toshiba Memory Corp. This deal will sell Toshiba’s memory division to a consortium that is led by Bain Capital Private Equity, which includes big names like Apple, Dell, SK Hynix and many other investors.
Originally, Toshiba wanted to sell off 20% of their highly profitable memory division but as time marched forward the company’s finances got worse, requiring a larger investment of 60% (a majority stake) and later 100%. This in part was due to the legal interference of Western Digital, the parent company of SanDisk, who delayed proceeding significantly and wished to acquire TMC for themselves.
As a result of this deal, Bain will create a special purpose acquisition company called Pangea, who will acquire TMC. Toshiba itself will invest $3.1 Billion into Pangea to ensure a stable transfer and ensure investment in the company’s infrastructure. Bain has also agreed to place “appropriate restrictions” on Pangea to ensure that TMC’s technology will remain secure, given the fact that rivals like SK Hynix as investors.
The deal was agreed to on Wednesday by Toshiba’s board of directors, easing pressure from the company’s creditors and shareholders. Sadly, Toshiba’s memory division was a driving force for the company’s growth in recent years, leaving Toshiba as a shell of its former self.
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