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Toshiba signs 2t yen deal to sell chip unit to Bain Capital
[TOKYO] Toshiba said on Thursday it had formally signed a deal to sell its memory chip business to a group led by US investor Bain Capital for around US$18 billion.
The sale to the consortium - which includes US tech giants Apple and Dell as well as South Korean chipmaker SK Hynix - is seen as crucial to keeping the struggling Japanese conglomerate afloat.
Thursday's signing caps a months-long saga that saw heated courtroom battles, rival bids and the near-delisting of one of Japan's best-known firms.
"Today we signed a deal to sell" all the shares of its prized memory chip business to the consortium with a price tag of two trillion yen (S$24.11 billion), Toshiba said.
The Japanese firm had already said last week it would sell the business to the Bain-led group and aims to complete the sale by March.
Toshiba is the world's number-two chipmaker behind Samsung and the division's products are found in many smartphones and electronic gadgets.
The chip unit accounts for around a quarter of Toshiba's total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.
Toshiba narrowly averted a delisting this year, but it still faces the humiliating prospect of being yanked from Japan's premier stock exchange if the sale does not raise enough money.
Selling the chip division is seen as key to Toshiba's survival, as it battles to recover from multi-billion-dollar losses at its US nuclear operation Westinghouse Electric.
The Japanese industrial giant is still recovering from the disastrous acquisition of Westinghouse, which racked up billions of dollars in losses before being placed in bankruptcy protection.
Those huge losses came to light as the group was still reeling from revelations that top Toshiba executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.
Its most recent results published in August revealed a loss of US$8.8 billion in the last fiscal year, although it predicted it would swing back into the black this year.
The losses were a major embarrassment for a cornerstone of Japan, which traces its history back as far as 1875 when the company started life as a telegraph factory in what is now Tokyo's Ginza shopping district.