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China approves Toshiba's sale of $18 billion chip unit to Bain consortium

Reuters  |  TOKYO 

By and Taiga Uranaka

TOKYO (Reuters) - Corp said on Thursday that regulators have approved the $18 billion sale of its chip unit to a consortium led by private equity firm Bain Capital, marking the end to a year-long saga surrounding its most prized asset.

The antimonopoly review had been the last and biggest hurdle to a successful sale of Memory, the world's No. 2 of

The Bain consortium last year won a long and highly contentious battle for the business, which put up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit plunged it into crisis.Any approval of the deal would come at a time of trade tension between and which has fanned fears would delay reviews of major global chip deals. Xi Jinping confidante Liu He is currently in to discuss the trade dispute.

"All antitrust approvals have now been received and we are looking forward to closing this investment," said in a statement on Thursday.

"The Bain Capital-led consortium has committed to make significant capital investments to help develop and grow "

Toshiba said in a brief statement that it expects the deal to be completed on June 1.

A for said earlier in the day he was not aware of the situation and did not comment further. A for Bain was not immediately available for comment.

The prolonged review had fuelled speculation Toshiba might abandon the deal and pursue alternative plans such as an IPO for the unit.

The approval for the Bain consortium may raise hopes that will also give the greenlight to Qualcomm's proposed $44 billion takeover of rival Sources with knowledge of the matter told on Tuesday that there had yet to be any concrete breakthrough in

Bain's consortium includes South Korean chipmaker SK Hynix, Apple Inc, Dell Technologies, and

The deal will see Toshiba reinvest in the unit and together with Hoya Corp, a maker of parts for chip devices, Japanese firms will hold more than 50 percent of the business - a keen wish of the

If approval had not been granted, Toshiba had the option of walking away. It is no longer desperate for cash after a $5.4 billion new share issue to foreign investors late last year and some activist shareholders oppose the sale, arguing it significantly undervalues the unit.

But Toshiba's creditors, including top banks, have been keen for the deal to proceed, saying the company on its own is not able to shoulder the massive capital investment necessary to keep up with rivals like

(Reporting by and Taiga Uranaka; Additional reporting Makiko Yamazaki and Junko Fujita in Tokyo, Stella Qiu in and Miyoung Kim in Singapore; Editing by and Alexandra Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 20:02 IST