Silver Lake, Broadcom bid $18bn for Toshiba Memory

April 05, 2017 // By Peter Clarke
Toshiba has closed an initial round of bidding for its memory business unit with about 10 interested parties that include a joint bid from private equity company Silver Lake Partners and Broadcom Corp., according to a Nikkei Asian Review report.

Other bidders are thought to include Western Digital, which has a manufacturing relationship with Toshiba, rival memory maker SK Hynix. Hon Hai Precision Industries, which trades as Foxconn, is also thought to be interested. Elsewhere it has been reported that Google, Amazon and Apple are also interested.

The Silver Lake, Broadcom bid was roughly 2 trillion yen (about $18 billion), said to be at the high end of estimates for Toshiba Memory which is expected to sell for between 1.5 and 2 trillion yen.

However, any deal would necessitate Japanese government approval because of the use of Toshiba memories in solid-state drives by the government, the Nikkei report said. For this reason, a bid from the United States, with which Japan has political security links, is said to be favored.

Struggling Toshiba needs to raise money to cover a write down on its nuclear power business. Initially it said it would consider selling a minority stake in its profitable memory chip business to try and raise money but when this received little interest said it would consider selling off the entire memory business. Toshiba's nuclear energy subsidiary The Westinghouse Electric Company, filed for Chapter 11 bankruptcy protection in New York on March 29. Toshiba's shareholders approved the selloff of Toshiba Memory the day after.

Toshiba's chip business, predominantly the manufacturing of NAND flash memory for Western Digital and others, is one of the few profitable businesses in Toshiba's portfolio.

Related links and articles:

www.toshiba.co.jp

www.silverlake.com

Nikkei Asian Review article

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