Toshiba Corp. (TOSYY) said Wednesday that it has signed a letter of agreement to sell its prized memory chip unit to a group of bidders led by Bain Capital LLC, potentially marking the end to the prolonged sale process that looks to eliminate Western Digital Corp. (WDC)
In a brief statement published in Tokyo, Toshiba said it would negotiate a “mutually satisfactory definitive agreement” with the Bain-led group that would close the sale by the end of the month. No financial terms were provided by the unit has attracted bids in the region of $18 billion U.S. dollars, according to previous reports. Toshiba also noted, however, that the agreement is non-binding and “does not eliminate the possibility of negotiations with other consortia.”
“Toshiba intends to reach a definitive agreement that fully meets our objectives at the earliest possible date,” said Toshiba’s senior vice president Yasuo Naruke. “The sale of TMC must promote further growth of TMC’s memory business, and return Toshiba group to positive equity.
“The memory business is highly time sensitive. It requires timely investments, accelerated product development, and the ability to quickly ramp-up large-scale production capacity,” Naruke added. “TMC is now proceeding with a unilateral investment in manufacturing equipment for the Fab 6 clean room at its Yokkaichi Operations, and we aim to increase the output of 3D Flash memory at Yokkaichi to approximately 90% of capacity in FY2018.
Toshiba missed a self-imposed deadline to choose a buyer for its memory chip unit by the end of August, but noted that at the time that it remained in talks with three bidders for the about $18 billion business.