TOKYO -- China's competition watchdog has approved the sale of Toshiba's memory unit, Nikkei has learned. A consortium of companies from the U.S., South Korea and Japan, including Bain Capital and SK Hynix, will pay 2 trillion yen ($18.1 billion) to buy Toshiba Memory, according to people familiar with the matter.
The contract between Toshiba and the consortium for the sale of the chipmaker was made last September. The two parties had originally expected to complete the deal by the end of March, but a lack in clearance by the watchdog had delayed the deal.
China's antitrust authorities were said to have withheld the green light until recently for two reasons, which included the participation of SK Hynix in the consortium. China was concerned over the South Korean chipmaker gaining ground in the chipmaking business through the purchase of Toshiba Memory, as Beijing is looking to turn the manufacturing of chips into a core domestic industry.
The other reason behind the delay was said to be U.S. President Donald Trump's protectionist tendencies. Because the consortium is led by U.S.-based Bain Capital, China might have intended to use the deal as a diplomatic tool to persuade the U.S. to loosen its stance on trade. But now that Trump and Chinese President Xi Jinping have been working to orchestrate a reconciliatory tone on trade issues, the watchdog had less incentive to slow the deal.
The sale of the memory unit is crucial for the financial improvement of indebted Toshiba. The Japanese electronics giant was considering an initial public offering of Toshiba Memory if the deal to sell the unit was turned down by Chinese authorities.
With the clearance, Toshiba is likely to stick to its original plan, which is to ensure corporate rehabilitation by selling the memory arm and paying down debt.
Masayuki Yuda contributed to this article.