Takeover Battle
SK hynix has teamed up with a U.S.-based private equity firm (PEF) Bain Capital to acquire the memory chip unit of Toshiba, the world's second-largest maker of NAND flash memory chips.
It has been found that the Korea’s second largest chipmaker has formed a consortium with Bain Capital to jointly participate in the takeover battle of Toshiba. The two companies attended Toshiba's presentation held in Japan last week. The Boston-based PEF firm has been named as a potential bidder for the acquisition of Toshiba along with Silver Lake Partners and Kohlberg Kravis & Roberts (KKR).
SK Hynix intends to form a “multinational alliance” by adding Japanese financial investors to the consortium after joining hands with Bain Capital.
SK Hynix is known to present 2 trillion yen (20 trillion won) for the price at the preliminary bidding held on March 29. Taiwan’s Hon Hai Precision Industry, a holding company of Foxconn which produces Apple’s iPhones, presented 3 million yen, I million yen more than SK Hynix.
Recently SK Group chairman Chey Tae-Won expressed his strong will to take over the chip business of Toshiba even through hiking the bidding money, saying, “The preliminary bidding is non-binding legally, so its biding amount is meaningless.”
Under the circumstances, Bain Capital is expected to help SK attract additional Japanese financial investors. Bain has invested in Japan's largest family restaurant Skylark, Domino's Pizza Japan and the Japan Wind Development.
U.S. chipmaker Broadcom has also joined forces with another PEF firm Silver Lake Partners for taking over the memory business of Toshiba.
In addition, there are many hurdles left for SK Hynix to tide over, such as securing additional investors in its consortium with Bain Capital though money does not guarantee SK’s success in the bidding. SK Hynix needs to persuade the Japanese government and Toshiba. The preferred bidder will be selected around June.