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Toshiba completes $18bn sale of flash memory unit

Funds will help buttress finances at struggling Japanese conglomerate

Saddled with massive losses at its U.S. nuclear unit, Westinghouse Electric, Toshiba was forced to sell its main cash cow, Toshiba Memory.

TOKYO -- Japanese industrial conglomerate Toshiba  said Friday that it has completed the sale of its flash memory subsidiary, Toshiba Memory, to a consortium led by U.S. private equity group Bain Capital.

The sale raised about 2 trillion yen ($18 billion), Toshiba said. The proceeds are expected to be used to buttress the finances of the struggling Japanese conglomerate, which took a major hit last year from the bankruptcy of its U.S. nuclear unit, Westinghouse Electric. 

The Westinghouse failure caused Toshiba a loss of more than 1 trillion yen, forcing the Japanese company to sell Toshiba Memory, the company's main cash cow.

The transaction makes Bain the new top shareholder. But Toshiba retains a stake, and together with optical products maker Hoya, continues to own 50.1% of the memory maker.

South Korean memory maker SK Hynix is another major shareholder, though its voting rights will be capped at 15% for the next 10 years. Four U.S. companies -- Toshiba Memory clients such as Apple and Dell -- have also acquired shares in Toshiba Memory, though they do not carry voting rights.

Toshiba Memory is the world's second largest producer of flash memory chips after Samsung Electronics of South Korea.

The sale, initially announced in September, was delayed due to a lengthy review by Chinese antitrust authorities.

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