TOKYO: Japan’s Toshiba Corp. said on Thursday it had 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.
The sale of the unit — the world’s second biggest producer of NAND chips — was agreed last week after a tortuous auction process but the signing was delayed because consortium member Apple Inc. demanded new terms on chip supply, sources familiar with the matter have said.
The deal will see Toshiba reinvest in the unit and together with Hoya Corp., a medical technology firm that also makes parts for chip devices, Japanese firms will hold more than 50 percent of the business — a keen wish of the Japanese government.
A Japanese state-backed fund and bank have also expressed their interest in investing in the future subject to certain conditions, Toshiba said in a statement.
“With this deal, a lot of risks for Toshiba have disappeared. It can go back to being a normal company,” said Hideki Yasuda at Ace Research Institute.
Pressure from the Japanese government, changing alliances among suitors and a slew of revised bids has drawn out the auction over nine months — heightening the risk that the deal may not close before the end of Japan’s financial year in March as regulatory reviews usually take at least six months.
If the deal does not close before then, Toshiba — hurt by liabilities at is now bankrupt nuclear unit Westinghouse — is likely to end a second consecutive year in negative net worth, putting pressure on the Tokyo Stock Exchange to strip it of its listing status.
The sale also faces legal challenges from Western Digital, Toshiba’s chip venture partner and rejected suitor, which is seeking an injunction to block any deal that does not have its consent.
Western Digital, one of world’s leading makers of hard disk drives, paid some $16 billion last year to acquire SanDisk, Toshiba’s chip joint venture partner since 2000. It sees chips as a key pillar of growth and is desperate to keep the business out of the hands of rival chipmakers.
In addition to Apple, Bain’s consortium includes South Korean chipmaker SK Hynix, as well as Dell Inc., Seagate Technology Plc and Kingston Technology.
Under the deal, Toshiba will hold 40.2 percent of voting rights in the chip unit and Hoya Corp. will own 9.9 percent, while other members will hold a combined 49.9 percent, according to SK Hynix.
In a move to address anti-trust concerns that may come up in a regulatory review. Toshiba said SK Hynix would be firewalled from accessing proprietary information that belonged to the chip unit and would not be permitted to own more than 15 percent of voting rights for 10 years.
Toshiba signs deal to sell chip unit to Bain-led group for $18 billion
Toshiba signs deal to sell chip unit to Bain-led group for $18 billion
G7 countries to release oil reserves as IEA agrees to largest ever market intervention
- IEA recommends release of 400 million barrels
RIYADH: Germany, Japan and Austria will release part of their oil reserves after the International Energy Agency recommended the release of 400 million barrels of oil from stockpiles, the largest such move in IEA history.
In a statement, IEA Executive Director Fatih Birol said the flow of oil, gas and other commodities through the Strait of Hormuz have all but stopped, leading global energy supply to fall by around 20 percent.
Ahead of the confirmation of the move — a larger intervention than the 182.7 million barrels that were released in 2022 by in response to Russia’s invasion of Ukraine — several countries began setting out plans to bring their reserves into play as countries grapple with soaring crude prices amid the US-Israeli war with Iran.
Birol said: “I can now announce that IEA countries have decided to launch the largest ever release of emergency oil stocks in our agency's history.
“IEA countries will be making 400 million barrels of oil available to the market to offset the supply lost through the effective closure of the strait.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets.”
Germany’s Economy Minister Katherina Reiche confirmed on Wednesday her government plans to limit petrol price increases at filling stations to once a day and to introduce more stringent antitrust regulation of the sector.
She did not give an exact timing for those measures, but added that the US and Japan would be the largest contributors to the release of the oil reserves.
The US has not confirmed it would do so, but its Interior Secretary Doug Burgum told Fox News on Wednesday that “these are the kinds of moments that these reserves are used for.”
The announcements did not stop oil prices rising, with Brent crude up 3.26 percent to $90.66 a barrel at 4:29 p.m Saudi time, and West Texas Intermediate up 3.12 percent to $86.05. Both were some way below the $119 a barrel seen earlier in the week.
“The situation regarding oil supplies is tense, as the Strait of Hormuz is currently virtually impassable,” Germany’s Reiche said.
“We will comply with this request and contribute our share, because Germany stands behind the IEA’s most important principle: mutual solidarity,” Reiche said about the IEA’s request.
According to a statement by Reiche’s ministry, Germany will contribute 2.64 million tonnes of oil. This corresponds to 19.51 million barrels.
Reiche stressed there was no supply shortage in the country, which has a legally mandated reserve of oil and oil products intended to cover 90 days’ demand.
South Korea will release 22.46 million barrels of oil, which represents 5.6 percent of the total IEA ask, the country's industry ministry said.
“The government will consult with the IEA secretariat on details, such as the timing and amount, from the perspective of national interests in accordance with domestic conditions,” the ministry said in a statement.
The ministry said it would continue to coordinate closely with major countries in responding to high oil prices to minimise any domestic impact.
Austrian Economy Minister Wolfgang Hattmannsdorfer said his country was releasing part of the emergency oil reserve and extending the national strategic gas reserve, adding: “One thing is clear: in a crisis, there must be no crisis winners at the expense of commuters and businesses.”
Acting ahead of the IEA move, G7 member Japan announced plans to release 15 days' worth of private-sector oil reserves and one month's worth of state oil reserves.
“Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy market supply and demand, releasing reserves as early as the 16th of this month,” Prime Minister Sanae Takaichi said in a broadcast statement.
Following a meeting with the IEA on Wednesday, G7 energy ministers said: “In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.”
All IEA member countries are required to keep 90 days’ worth of their nation’s oil use in reserve in case of global disruption.
