Toshiba Selling its Memory Chip Business to Bain

The logo of Toshiba Corp is seen behind cherry blossoms at the company's headquarters in Tokyo Japan

Reuters reported that under the proposed transaction, Bain and SK Hynix also have brought in USA tech firms Apple and Dell, high-volume buyers of Toshiba chips, to help support the offer.

The deal is created to cover billions of dollars in losses racked up through Toshiba's U.S. nuclear unit.

While some had apparently expressed support for the plan, it was eventually rejected as many in the company could not overcome the distrust against the US firm following a bitter dispute between the two companies over the sale of the unit.

Earlier news reports said that the Japanese chip company had been delaying the final decision for sale as part of its efforts to raise the bidding price.

Western Digital has already taken its dispute with Toshiba to the International Court of Arbitration to prevent a sale without its consent, and a source with knowledge of the matter has previously said it is prepared to seek an immediate court injunction should the deal not go its way.

On Tuesday, sources had said Toshiba was leaning towards selling the branch to its USA joint venture partner Western Digital Corp.

Two Japanese state-backed financial institutions - the Innovation Network Corporation of Japan and the Development Bank of Japan - will join as investors once Toshiba and the winning consortium have settled legal differences over a joint venture with Western Digital. In fact, Toshiba board members were not even present during the proposal. Bain is thought to have support from Apple, Dell and SK Hynix, as well as other memory consumers.

It's unclear whether the sale to the Bain Capital-led group will proceed smoothly, as Western Digital has previously initiated legal action against Toshiba, arguing that no deal can be done without its consent due to its position as Toshiba's joint venture chip partner. But the MOU didn't preclude Toshiba from continuing to negotiate with other bidders. Yet, it is still not clear how much Apple will contribute to the agreement.

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