Toshiba Signs MOU with Bain-Led Consortium for Sale of Memory Unit

Japanese electronics company Toshiba (6502.TYO) said on Wednesday that it had entered into a memorandum of understanding (MOU) with Bain Capital Private Equity LP, the lead member of a consortium currently bidding to acquire Toshiba Memory Corporation.

The MOU memorializes the parties’ aim to negotiate an agreement for the sale of Toshiba Memory Corporation, the division of Toshiba which manufactures memory devices, by the end of the month, the statement published on Toshiba’s website said.

Toshiba said that it had been in continuing negotiations with three consortia of potential purchasers of Toshiba Memory Corporation and, over the course of the talks, it said that Bain had come forward with a new proposal and Toshiba’s board of directors had decided to continue discussions with the Bain-led consortium on the basis of the new proposal.

It said that the company would seek th conclusion of a stock purchase agreement by the end of this month.

“Toshiba intends to reach a definitive agreement that fully meets our objectives at the earliest possible date,” Dr Yasuo Naruke, senior executive vice president of Toshiba, said. “The sale of Toshiba Memory Corporation must promote further growth of Toshiba Memory Corporation’s memory business, and return Toshiba group to positive equity,” he added.

“The memory business is highly time-sensitive,” he added. “It requires timely investments, accelerated product development, and the ability to quickly ramp-up large-scale production capacity. Toshiba Memory Corporation is now proceeding with a unilateral investment in manufacturing equipment for the Fab 6 clean room at its Yokkaichi Operations, and we aim to increase the output of 3D Flash memory at Yokkaichi to approximately 90% of capacity in FY2018. Moving forward, we will continue to make timely investments to expand operations to meet growing market demand.”

Although Toshiba has entered into a non-binding MOU with Bain, it said that the signing of the MOU would not eliminate the possibility of negotiations with other consortia.

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