Toshiba is now closer to selling its NAND memory chip unit to a consortium led by its long-term joint venture partner Western Digital, industry sources said on Tuesday, suggesting that the top management of the Japanese tech giant has once again changed its mind over the preferred bidder for its flagship business. The Tokyo-based company signed a Memorandum of Understanding with Bain Capital just last week, signaling that it’s willing to offload its division to a consortium backed by the Boston, Massachusetts-based private equity firm. Western Digital supposedly gave assurances to Toshiba that it won’t seek to take more control over the chip business in which it already has a stake in case of a potential sale, essentially claiming that the deal itself wouldn’t be eligible for a large-scale antitrust investigation which the Japanese company is adamant to avoid as it’s looking to liquidate its NAND memory chip division as quickly as possible in face of increasing pressure from creditors and the Tokyo Stock Exchange which is threatening to delist it if it doesn’t manage to balance its books following the bankruptcy of its nuclear subsidiary in the United States which went under in early 2017.
The concessions that Western Digital supposedly gave to Toshiba signal that the San Jose, California-based data storage manufacturer dropped the idea of pulling from the consortium bidding for the chip unit which it reportedly considered earlier this summer. That move would have been another method of avoiding raising antitrust concerns with the deal and was supposedly an option for Western Digital who still claims that Toshiba isn’t allowed to liquidate its business without consent from its joint venture partner, as per their existing collaboration agreement. Toshiba’s Board of Directors reportedly met to discuss the matter earlier today, though the contents of their meeting are still unknown.
Most members of the tech giant’s top management are said to be extremely unhappy with the sale of Toshiba’s most profitable unit but all have reportedly agreed that such a move is necessary if the rest of the firm is to survive. Due to sanctions placed on the company following a 2015 accounting scandal, Toshiba isn’t in a position to seek a major loan in order to cover the losses incurred with the bankruptcy of Westinghouse Electric Company and is left with little choice but to liquidate a portion of its assets. As its NAND chip memory unit is its most profitable business, it’s also the easiest one to sell and could net Toshiba approximately $18 billion, depending on the buyer which the firm ends up choosing.