Toshiba said to have chosen Bain group

Toshiba selects Bain group as buyer of its memory chip business

The agreement requires Toshiba to publicly announce any deal to sell the venture and provide Western Digital two weeks' notice before any such sale closes.

A DBJ spokesman declined to comment.

The Toshiba-Western Digital alliance is playing catch-up on 3D NAND flash, DRAMeXchange added. The proposal aimed to dispel those fears.

In Japan, it was also anxious that the Korean chipmaker's participation in the acquisition would allow tech leaks, weakening Japan's competitiveness in semiconductors.

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 said it is prepared to seek an immediate court injunction should the deal not go its way. This means that memory has become the main profit driver for Toshiba. Initially, Toshiba and the Japanese government were concerned to hand over Toshiba's memory business to China and South Korea.

Toshiba dubbed its plan to sell Toshiba Memory "Project Pangaea".

The total purchase price for the transfer is planned to be JPY2 trillion (US$17.8 billion).

Under the procedure outlined by Toshiba on Wednesday, it would sell the chip unit for about $18 billion to K.K. Pangea, a special goal company set up by Bain. Toshiba's "commitment line" by its main banks, under which it could borrow money as needed without review, was due to expire at the end of September.

Bain Capital is expected to hold a 49.9 percent stake in the business, with Toshiba and other Japanese firms taking up 40 percent and 10.1 percent, respectively, in an apparent bid to secure Japan's interest, industry watchers said. Was there any chance of the INCJ snatching victory from the jaws of defeat? Shares of Western Digital fell 4 percent in the U.S. Wednesday. Without the sale, the company may have been dropped from the stock markets. But Toshiba had no time left to examine the implications of this offer. The threat of Western Digital's litigation scared off some Japanese financing sources, causing Bain to scramble for more partners in the consortium, according to people familiar with the discussions.

But the auditors finally signed off in August after an investigation that centered on whether Toshiba had known in advance about the losses that emerged related to Westinghouse's acquisition of CB&I Stone & Webster, a nuclear construction and services business.

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