Shelling Out $3 Billion
With all three bidders for the takeover of Toshiba Semiconductors made proposals with the participation of Apple, it is said that Apple is likely to join the "Korea-US-Japan alliance" that SK Hynix participates in.
On September 14 (local time), Bloomberg quoted some sources as saying that Apple is discussing plans to shell out about US$3 billion to the Korea-US-Japan alliance. Dell, Seagate and SK Hynix are participating in the Korea-US-Japan alliance led by US private-equity fund Bain Capital. Sources said Apple was planning to acquire equities in Toshiba Semiconductor with Bain Capital.
The sources said that support from Apple made Toshiba confident in cutting a deal with the the Korea-US-Japan alliance and finally sign an agreement this month by signing a memorandum of understanding with Bain Capital. On September 13, Toshiba held a board meeting and signed a memorandum of understanding that is not legally binding with Bain.
If the acquisition is completed, this deal will be Apple's biggest-ever deal. Earlier, Apple bought Beats Electronics for US$3 billion.
Toshiba's partner, Western Digital Corp (WD) sued Toshiba for a ban on the sell-off of its semiconductor business, making Innovation Network Corporation of Japan and the Development Bank of Japan and Japan's Policy Investment Bank waiting for the outcome of the lawsuit. Apple is likely to make up for a financial shortfall until the judgment.
Apple is blocking WD from acquiring Toshiba Memory. The sources explained that Apple is doing so due to Toshiba's semiconductor business’ strategic importance. Apple's iPhone and iPods are heavily dependent on Toshiba's semiconductors. If Toshiba's supply of semiconductors halts, Apple will have to rely entirely on its competitor, Samsung Electronics which is a scenario that Apple does not want to see. That is why Apple wants a stable supply of semiconductors from Toshiba.