A consortium led by Bain Capital has made a revised last-ditch offer for Toshiba Corp’s chip unit worth about US$18 billion, bringing in Apple Inc. to help bolster its bid, Reuters reports, citing sources with direct knowledge of the matter said.
The new offer comes as separate sources say the embattled Japanese conglomerate and Western Digital Corp are struggling to strike a deal ahead of their self-imposed deadline of Thursday.
Toshiba has been scrambling to sell its flash memory unit — the world’s No. 2 producer of NAND chips — to cover billions in losses at its bankrupt US nuclear business Westinghouse.
Toshiba’s relationship with Western Digital, its joint venture partner for its chip business, has been rocky throughout the auction process — to the point that other bidders were favored first while the US firm has also initiated legal action that threatens to derail any deal that does not have its consent.
The revised offer is worth some 2 trillion yen (US$18.2 billion). Bain and South Korean chipmaker SK Hynix Inc will be responsible for 1.1 trillion yen, while Apple will provide up to 400 billion yen and Japanese banks will give around 600 billion yen in support, one of the sources said.
The proposal also calls for Toshiba to be part of the deal, investing 200 billion yen, the source said.
By taking part in the bidding, Apple could help ensure a competitive supply chain and lessen its dependence on the chip division of Samsung, a key rival in the smart phone business.
Apple buys memory chips from multiple vendors, including market leader Samsung. Combined, Toshiba and Western Digital could be almost as large as Samsung’s memory unit, which could give a combined company more negotiating leverage against Apple.
“Apple is so big they need to multi-source,” said Frank Gillett, an analyst with market research firm Forrester. He said Apple needed to keep as many chip suppliers as possible in the market to keep prices competitive.
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