Mike Wuerthele
Refuting speculation that the deal to buy Toshiba's memory division is effectively done. Foxconn Chairman Terry Gou declared on Friday that he expects that his company still has a '"50 percent chance" of winning.
A summary of several Chinese-language media reports about the Foxconn chairman's remarks about the exclusivity given to the Bain Capital group's consortium was published by DigiTimes on Friday, with the outspoken executive speaking his mind about the deal, and the parties involved.
Gou blames political gamesmanship for the priority given to the consortium that includes the Japanese government. The executive pointed to a previous snub of the Japanese government by Gou when Foxconn purchased Sharp, and a refusal to allow the government to be a part of the deal at that time.
He reinforces that Foxconn's bloc would take on the debts owed by Toshiba, where the Japanese government would convert them into bad debt, and use the government's money to pay them off at pennies on the dollar.
On Wednesday, Toshiba chose a consortium formed by Bain Capital, Mitsubishi, and Japanese government investors as the preferred bidder for its memory chip business with a bid of over $17.9 billion. However, the preference has apparently only resulted in a temporary exclusivity, according to Gou.
Toshiba's memory unit is up for sale in an attempt to cover billions in losses from its bankrupt U.S. nuclear division, Westinghouse. The Westinghouse failures in the U.S. are attributed to a declining political appetite for nuclear power, fewer maintenance demands as a result of power plants destined for closure and a shrinking Navy fleet, and management failures.
While other bidders were offering higher sums, the Bain/Japan consortium has implicit support from the government. Governmental support in theory will speed up the sale process, and somewhat mitigate concerns about critical technology leaking out of country.
Western Digital, which operates Toshiba's main chip factory, has filed a legal action claiming Toshiba can't make a deal without its consent, and is concerned that intellectual property will somehow make it to its main rival in the sector, SK Hynix. The Japanese trade ministry is allegedly talking to Western Digital, hoping to convince it to join the consortium.
Foxconn chairman Terry Gou confirmed Apple and Dell's participation earlier this month. Kingston was also cited as a consortium partner — Amazon, Cisco, Google, and Microsoft, meanwhile, were cited as potential backers.
Andrew Orr
Christine McKee
Sponsored Content
Wesley Hilliard
AppleInsider Staff
Amber Neely
1 Comment
If it's a good deal for Foxconn, Dell, and Apple, I really hope they get Toshiba's memory business.
We certainly don't need more money managers raping companies to fuel their appetites for mansions. Foxconn et. al. will work the IP to produce better products, to everyone's benefit.