Japan's Toshiba Corp has signed an $18 billion deal to sell its chip unit to a consortium led by Bain Capital LP, overcoming a key - albeit not its last - hurdle as it scrambles for funds to stave off a potential delisting. Sonia Legg reports.
It's the jewel in Toshiba's once proud crown. But the Japanese giant has finally agreed to sell its prized chip business. It's signed a deal with Bain Capital for $18 billion. It was a huge relief for Toshiba - even if the news conference afterward didn't go to plan. (SOUNDBITE) (Japanese) BAIN CAPITAL JAPAN CEO, YUJI SUGIMOTO, SAYING: "I'm very sorry to announce that we cannot avoid cancelling the news conference, because we could not get approval from all the related parties." Toshiba has been struggling to avoid being delisted - after a failed nuclear venture in the U.S. left big holes in its balance sheet. The sale of the NAND chip business - the world's second biggest - has been tortuous. Just last week Apple - a member of the buying consortium - reportedly demanded new terms on chip supply. (SOUNDBITE) (English) JEREMY COOK, CHIEF ECONOMIST, WORLD FIRST, SAYING "I think they've got a good price for it and the conglomerate of people with Bain, Apple coming in and buying up the rights to these solid memory chips which are so prevalent in today's electronics, means that both parties have won out for now." Keeping the business largely Japanese was key for the government. The deal will now see Toshiba reinvest in the unit along with Hoya - a Japanese medical technology firm. Together, they'll hold more than 50 percent of the business - with the other consortium members, including Dell and South Korea's SK Hynix - controlling the rest. But there are still challenges ahead. Toshiba's chip venture partner and rejected suitor Western Digital is seeking an injunction to block any deal it doesn't like. Even so Toshiba's shares got a welcome two percent boost from the announcement.