Toshiba said on September 20, 2017 it would sell its memory chip business to a group led by US investor Bain Capital, in a deal worth around 18 billion USD and seen as crucial to keeping the Japanese conglomerate afloat. / AFP PHOTO / Toru YAMANAKA
TOKYO, Japan (AFP) — Toshiba tumbled Thursday after saying it would sell its memory chip business for around $18 billion, as its US partner vowed to keep fighting to block a deal seen as crucial to the Japanese industrial conglomerate’s survival.
The embattled stock fell as much as 5.39 percent to 298 yen, before it recovered to 306 yen, still down 2.85 percent.
Late Wednesday, Toshiba announced the sale to a group led by US investor Bain Capital — which includes US tech giants Apple and Dell as well as South Korean chipmaker SK Hynix.
Thursday’s drop came as Toshiba’s US chip factory partner, Western Digital, vowed to keep trying to block the sale in court. It was a rival bidder for the lucrative unit.
“The deal was within expectations so there aren’t many market-moving factors left, but there is still uncertainty about a court battle with Western Digital,” said Hideyuki Suzuki, head of investment information at SBI Securities.
The sale caps a months-long saga that saw heated courtroom battles, rival bids and the near-delisting of one of Japan’s best-known firms.
Western Digital called the deal “unfortunate” and said that it would be “forced to initiate” further legal action.
It said it has filed an additional request to the London-based International Court of Arbitration over the sale.
Toshiba is the world’s number two chipmaker behind Samsung and the division’s products are found in many smartphones and electronic gadgets.
The chip unit accounts for around a quarter of Toshiba’s total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.
Selling the chip division is seen as key to Toshiba’s survival, as it battles to recover from multi-billion-dollar losses at its US nuclear operation Westinghouse Electric.
The shares are down about 30 percent from late December when Toshiba revealed the eye-watering losses at Westinghouse.
© Agence France-Presse