Troubled Japanese firm Toshiba Corporation has gotten the final stamp of governmental approval it needed to sell off its memory chip business, known as Toshiba Memory Corporation (TMC). In a statement released today, Toshiba says the final sale of all TMC shares to K. K. Pangea will happen on June 1. The sale price comes out to ¥2 trillion, or around $18 billion.
If (like I was) you're wondering who K. K. Pangea is, you can more or less think of it as "that company that bought TMC." K. K. Pangea was specifically formed to be the front-end of a group led by Bain Capital that includes SK Hynix, Apple, Dell, Seagate, Kingston, and Japanese medical technology firm Hoya, as well as Toshiba Corporation itself, who is reportedly re-investing ¥350 billion ($3.1 billion) in the unit.
Despite the change in ownership, TMC will remain a Toshiba Corporation subsidiary. As a result, it seems the sale won't immediately affect day-to-day operations for the company. To satisfy Japanese regulators, the group agreed to give Toshiba Corporation and Hoya "more than 50% of voting power," according to TechCrunch.
Bloomberg notes that the Chinese Ministry of Commerce was delaying its regulatory approval due to concern regarding SK Hynix's involvement in the deal. That may be the reason why the final agreement restricts SK Hynix from access to TMC's intellectual property. For whatever reason, the Chinese officials ultimately gave their approval. That was the final roadblock in the sale that will now proceed next month.
Western Digital attempted to block Toshiba from selling the unit, and failing that, attempted to throw its weight behind a competing offer from two investment firms backed by the Japanese government. There were provisions in the deal to adjust the offer if WD pursued litigation against TMC, but since the sale is proceeding at the original price, WD may have abandoned that cause.
Toshiba Corporation was forced to sell off TMC due to extreme financial stress caused by the failure of its US nuclear power venture. The company's Westinghouse Electric unit filed for bankruptcy last year after billions of dollars of cost overruns halted construction of four new nuclear reactors. The fallout from the failure of Westinghouse was so great that Toshiba, who first invented NAND flash technology in 1987, had to negotiate the sale of TMC just to stay afloat.