The day before yesterday ended which lasted a year and a half Saga with the sale of the semiconductor business of Toshiba. The interesting question is not for everyone, but it is an important milestone for the market as a whole, so I think it is worth it to highlight.
So, it all started in January of 2017, when the Network appeared information about the fact that Toshiba says it can allocate its semiconductor business into a separate company and then sell most of it. For the record, Toshiba is (technically already “were”) one of the largest semiconductor manufacturers. In particular, the company was the second largest producer of NAND flash memory.
So why to sell a successful unit? The point is that Toshiba was a subsidiary of Westinghouse Electric involved in nuclear energy. Yes, Toshiba is not only laptops, memory, and other gadgets.
And this is the Westinghouse Electric company, which operated in the United States, due to severe strategic miscalculations, falling natural gas prices, decreasing electricity demand and other reasons quite dramatically proved unprofitable. The loss amounted to more than $ 6 billion, and the company’s total debt reached 10 billion dollars. By the way, later Toshiba has filed for bankruptcy Westinghouse Electric.
Such huge losses have to compensate somehow. One option that has started to consider the Toshiba was the sale of the semiconductor business. Various rumors quoted different amounts. Skeptical analysts were talking about $ 7 billion, Toshiba itself originally referred to the amount of 9-13 billion, and later, we are talking about amounts to more than 20 billion. Looking ahead, the total amount exceeded $ 18 billion.
In fact, approximately one month after the first rumors of the mechanisms was launched. Among potential buyers were called Western Digital, Foxconn, and even Apple.
Last summer, Western Digital, Toshiba filed in court. The problem was that these two companies have a joint venture to produce flash memory, and Toshiba in its decision on selling part of the business partner’s interests are not taken into account. Too late, Toshiba has filed a lawsuit against WD, accusing the latter of illegal access to industrial secrets and Toshiba TMC. Western Digital even managed to temporarily block the deal, though, judging by the fact that the transaction itself was carried out only now, that lock is hardly something decided.
In addition, Western Digital has claimed that it has the right of first offer regarding the purchase of a business to Toshiba. But in the end the companies are not fused, although their lawsuit they settled.
At the end of last year, Toshiba has attracted foreign investment of $ 5.4 billion. In addition, due to the growing NAND memory market, the company has improved the overall financial position. And there was talk about what to sell semiconductor business has a special need then and there. But the process has not stopped.
In the end, the deal reached the final stages, when it is necessary to obtain the approval of the major global regulators. It stalled in China. Due to the escalation of the trade war the US and China, the regulator of China delayed the verdict. Come down to the fact that Toshiba has already ceased to believe in the possibility to sell the business.
However, in mid-may. And here 1 may it became known that the transaction took place.
In the end, the buyer was the company K. K. Pangea. It is specially created for the transaction by the company. It was created by a consortium of many companies. Key player of the consortium — an investment Fund Bain Capital. Also, there are present SK Hynix, Apple Inc, Dell Technologies, Seagate Technology, Development Bank of Japan, Kingston Technology and others. What someone shares is unclear.
Under the deal, Toshiba will receive dividen in the amount of $ 1.1 billion. In addition, the company acquired 40.2% of the shares in Pangea. Pangea itself has a 49.9% stake and another 9.9% on Hoya.
At us the whole story has hardly reflected, but this is a good example of the fact that so very suddenly, a huge multibillion-dollar Corporation because of problems only one, and not the most important, the unit had to be stripped of its core business. In addition, we received a “new” major player in the semiconductor market.