Bain's acquisition of Toshiba wafer storage business cannot be completed on schedule
On the afternoon of March 30, Toshiba was unable to complete a sales transaction of 2 trillion yen (about 19 billion U.S. dollars) in the storage wafer business by the end of March due to the failure to obtain approval from the regulatory authorities in time, which caused the plan to be postponed at least. One month.
Chinese regulators are still assessing the impact of the deal on the world’s largest semiconductor market, and no final approval has yet been made. Even if the approval is completed on the last two days of the month, there may not be enough time to complete all the processes. According to the terms of the agreement, the new deadline will be postponed until May 1, and Toshiba needs to be approved before April 13 to complete the transaction on time.
As the inventor of the NAND die technology, Toshiba sold its storage wafer business in 2017 and hopes to repair a severely damaged balance sheet due to a loss in the nuclear power business. If the buyer Bain Capital withdraws, Toshiba has at least three options: it is possible to renegotiate terms at a higher price, promote the listing of the storage wafer business, or retain the division.
"Most investors believe that the acquisition will eventually be completed. But if it can not be completed, there is no harm to Toshiba," said Hideki Yasuda, an analyst at Ace Research Institute.
According to reports, officials of the Chinese Ministry of Commerce are mainly concerned with the role played by SK Hynix, which is also part of the Bain Foundation. The Korean wafer maker may eventually occupy an important stake in this business, which will integrate the top companies. China’s Ministry of Commerce may also impose certain conditions that will have a material impact on the value of the business, such as requesting Toshiba to freeze prices or splitting solid-state drives and storage wafers.
A Toshiba spokesman said that as of late Thursday, Toshiba has not yet received approval from some antitrust agencies, but the company still plans to complete the transaction as soon as possible.
Chinese regulators are still assessing the impact of the deal on the world’s largest semiconductor market, and no final approval has yet been made. Even if the approval is completed on the last two days of the month, there may not be enough time to complete all the processes. According to the terms of the agreement, the new deadline will be postponed until May 1, and Toshiba needs to be approved before April 13 to complete the transaction on time.
As the inventor of the NAND die technology, Toshiba sold its storage wafer business in 2017 and hopes to repair a severely damaged balance sheet due to a loss in the nuclear power business. If the buyer Bain Capital withdraws, Toshiba has at least three options: it is possible to renegotiate terms at a higher price, promote the listing of the storage wafer business, or retain the division.
"Most investors believe that the acquisition will eventually be completed. But if it can not be completed, there is no harm to Toshiba," said Hideki Yasuda, an analyst at Ace Research Institute.
According to reports, officials of the Chinese Ministry of Commerce are mainly concerned with the role played by SK Hynix, which is also part of the Bain Foundation. The Korean wafer maker may eventually occupy an important stake in this business, which will integrate the top companies. China’s Ministry of Commerce may also impose certain conditions that will have a material impact on the value of the business, such as requesting Toshiba to freeze prices or splitting solid-state drives and storage wafers.
A Toshiba spokesman said that as of late Thursday, Toshiba has not yet received approval from some antitrust agencies, but the company still plans to complete the transaction as soon as possible.