SK Group Chairman Chey Tae-won will be flying to Japan and the United States next week in hopes to turn the tables around to SK Hynix’s favor in the bid for Toshiba Corp.’s flash memory business whose worth has shot up to near $30 billion amid heated pursuit from not only chipmakers around the world but also technology giants Apple and Google as well as the Japanese government and industry intent to keep chip business in Japan.
According to multiple industry sources Wednesday, Chey is scheduled to make a pitch on behalf of SK Hynix to Toshiba executives on Monday. He would also be meeting Japanese companies and financial institutions to recruit his team for the final bid on the mega-scale deal next month. Then he would be flying to the U.S. hopefully to arrange a meeting with U.S. fables chipmaker Broadcom reportedly to have presented a preliminary price in the range of $18 billion to $28 billion by teaming up with U.S. asset company Silver Lake Management. He also would be in contact with Bain Capital, a U.S. private equity firm that also had a keen investment interest in Toshiba’s lucrative memory business, and other financial investors.
The sale of Toshiba’s NAND (nonvolatile storage) flash memory, the world’s second largest after Samsung Electronics, has become heated and costly with legal complexities and intervention from the Japanese government on top of growing list of bidders.
The prospective buyers have been narrowed down to Broadcom co-headquartered in San Jose, California and Singapore, Foxconn Technology of Taiwan (Hon Hai Precision Industry), Western Digital of the U.S. with whom Toshiba runs NAND joint-venture fab, and SK Hynix.
The bidders are realigning their teams in a dizzy pace not only for the sheer price of the deal but to avoid legal and political challenges. The Tokyo government has strongly hinted at interfering to prevent full sale of the flash memory business to a non-Japanese company especially with ties with China.
Foxconn reported to have offered $28 billion is said to have added multinational and Japanese color by including Sharp that it acquired last year, Softbank, and Apple in its team.
Singapore-backed Broadcom is said to have upped its chances by courting Japanese government-supported innovation fund and major Japanese banks in its team. It faces challenge from Western Digital that claims violation to its joint-venture terms, particularly with Broadcom and SK Hynix that it directly competes with.
SK Hynix eager to have a piece of the Toshiba’s NAND capacity amid tight supply and ever-growing demand and applications for flash memory plans to join one of the prospective bandwagons.
By Hwang Hyung-gyu and Jung Wook
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]