TOKYO, Sept. 20 (Xinhua) -- Toshiba Corp. will sell its prized chip unit to a Japan-U.S.-South Korean syndicate with its joint venture partner Western Digital Corp. now out of the running, sources with knowledge of the matter said Wednesday.
The syndicate, which includes the state-backed Innovation Network Corp. of Japan, the Development Bank of Japan, South Korean chipmaker SK Hynix Inc. and four U.S. tech firms, will pay around 2.4 trillion yen (21.52 billion U.S. dollars) for Toshiba Memory Corp.
The decision was made at a board meeting following a last-minute bid by Western Digital, which jointly invests in Toshiba's Yokkaichi flash memory plant.
Sources close to the matter said that some investors were in favor of Western Digital's revised offer, but others said they couldn't trust the U.S. firm following a legal spat between the two companies over the sale of the chip unit.
The decision came after Toshiba earlier in the month signed a memorandum of understanding to continue talks to sell its chip business to the multi-national syndicate, which includes private equity firm Bain Capital.
Bain Capital and SK Hynix, as part of the accepted bid, will reportedly bear the brunt of the legal costs associated with the dispute, while a settlement with Western Digital needs to be made quickly or the deal announced Wednesday could be blocked, the sources said.
Toshiba has been trying to spin off its chip business to help mitigate its hefty debt woes and losses related to its now-bankrupt U.S. Westinghouse nuclear unit.
Toshiba needed to wrap up the deal quickly to avoid its liabilities exceeding its assets for two straight years and being automatically delisted from the Tokyo Stock Exchange (TSE).
Toshiba missed its own deadline set for June to have the deal concluded and narrowly avoided being delisted from the TSE in August by submitting its delayed financial results for fiscal 2016 after the results were broadly signed off on by its auditor.
