It’s unclear whether the sale to the Bain Capital-led group will proceed smoothly, as Western Digital has previously initiated legal action against Toshiba, arguing that no deal can be done without its consent due to its position as Toshiba’s joint venture Chip partner.
“The large number of stakeholders could complicate decision-making and slow down key investment decisions,” he said, adding the participation of Toshiba clients would also sap the ability of the chips business to negotiate competitively on pricing.
Also, the semiconductor business requires huge amounts of investment, and Toshiba’s chip unit risks losing its competitive ability as rivals such as Samsung Electronics ( 005930.KS ) roll out big capital spending plans.
The Bain-led group had been chosen in June as preferred bidder, but those talks lapsed as Japanese government investors, who had been part of that consortium, told Toshiba they were reluctant to close a deal with the Western Digital legal challenges still pending.
- Bain-Led Group to Buy Toshiba Chip Unit in $18 Billion DealBloomberg
- Toshiba agrees to sell chip business to Bain-led group for $18 billionCNBC
- Toshiba says seals $18 billion deal to sell chip unit to Bain Capital groupYahoo Finance
- Toshiba seals $18bn memory chip sale to Bain-led groupFinancial Times
- Toshiba to sell chip unit for $18bn to plug lossesBBC News
- Toshiba board decides on chip sale to Bain Capital groupPhys.Org
- Western Digital calls Toshiba-Bain deal 'troubling'Financial Times
- Toshiba Selling its Memory Chip Business to BainThe Mac Observer
- Toshiba to sell chip unit to Bain Capital-led group for US$18 billionChannel NewsAsia