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SK Hynix decides to invest 3.5 billion dollars in Toshiba chip unit

SK Hynix decides to invest 3.5 billion dollars in Toshiba chip unit

Posted September. 28, 2017 07:47,   

Updated September. 28, 2017 08:48


SK Hynix has agreed to invest in Toshiba’s memory chip unit at a Board of Directors meeting on Wednesday and unveiled its investment amount and conditions. The consortium consisting of SK Hynix and U.S. and Japanese partners plans to invest 17.7 billion U.S. dollars, and SK Hynix’s contribution will be worth 3.5 billion dollars.

Among members of the global consortium are Bain Capital, Apple, Kingston Technology, Seagate Technology and Dell. The global consortium will hold 49.9 percent of the voting right, while Toshiba and Japan’s Hoya Group will have 40.2 percent and 9.9 percent, respectively. SK Hynix plans to invest 1.1 billion dollars through convertible bonds, which will allow it to acquire as much as 15 percent of stakes in the memory chip unit in the future. Given that the remainder will be invested in a fund that will be set up by Bain Capital, fund earnings are expected if the memory chip unit is listed in the future. In the meantime, Apple, Kingston, Seagate and Dell will invest through private equity, preferred stocks.

The Korea-U.S.-Japan consortium plans to sign a stock purchase agreement with Toshiba as soon as possible and complete the takeover no later than March 2018.

“SK Hynix will strengthen its corporate competitiveness by taking a leading position in the NAND flash business via investment in Toshiba’s memory chip unit,” said SK Hynix. “It has a significant meaning that the global consortium with international partners will help SK Hynix use it as a launch pad for global cooperation.”

Sung-Gyu Kim sunggyu@donga.com