Changing Partners?
The Asahi Newspaper in Japan reported on July 27 that a deadlock in the negotiation to sell off Toshiba Semiconductor put a plan to take SK Hynix out of the Korea-US-Japan alliance and let Western Digital of the US in the alliance under consideration.
The newspaper said that as Toshiba was negotiating to cut a deal to sell off Toshiba Memory between the Korea-US-Japan alliance and Toshiba memory, but no adjustment was made in acquisition terms, a new idea was generated that a new alliance will be formed without SK Hynix.
Toshiba originally wanted to make an official contract with the Korea-US-Japan alliance led by the Innovation Network Corporation of Japan within June. But WD, which is a partner of Toshiba, filed a lawsuit against Toshiba’s plan to sell Toshiba Memory to the Korea-US-Japan alliance in a US court and the International Arbitration Tribunal
As the Korea-US-Japan alliance set the settlement of the dispute between Toshiba and WD as a condition of their takeover of Toshiba Memory, the negotiation hit a snag.
According to an official, WD is opposing the fact that SK Hynix imposed a condition to intervene in the right to the management of Toshiba Memory, not to be indirectly involved in its management such as loaning funds for acquisition. So, Toshiba that could not ignore WD, began to seek ways to exclude SK and bring in WD instead, the newspaper pointed out.
If SK goes out of the Korea-US-Japan alliance, US investment fund Bain Capital partnering with SK will follow SK. In that case, US private equity firm Kohlberg Kravis Roberts (KKR) will step in, turning the Korea-US-Japan alliance into a US-Japan alliance, the newspaper forecast.
However, if WD invests in Toshiba Memory which is a partner of WD, it is highly likely that examinations will be prolonged in terms of antitrust laws in nations of companies involved. The newspaper forecast that the sale of Toshiba within this year will be virtually difficult, aggravating the chaos.