Japan-U.S. Team Seen Leading Race for Toshiba Chip Unit

Tokyo, April 28 (Jiji Press)--A Japanese-U.S. consortium is seen leading the race for Toshiba Corp.'s

lucrative flash memory unit, as the struggling Japanese electronics and machinery giant is slated to hold the second round of bidding in May, it has been learned. With U.S. investment firm Kohlberg Kravis Roberts & Co. at the center of the consortium, Innovation Network Corp. of Japan and the Development Bank of Japan, both backed by the Japanese government, are expected to partly finance the acquisition of Toshiba Memory Corp. Fujitsu Ltd.

and some other Japanese companies are considering taking part in the group. "The ideal situation is that Toshiba's U.S. partner Western Digital Corp., as well as Japanese firms with business ties with Toshiba, will join the consortium," a source familiar with the matter said. Wary of the possible outflow of Toshiba's flash memory technology to China, Taiwan or others, the Japanese government is backing the Japanese-U.S. initiative to secure the Toshiba unit. To address such concerns, Taiwan's Hon Hai Precision Industry Co., also known as Foxconn Technology Group, is seeking Japanese and U.S. partners on its bid for Toshiba Memory. Hon Hai has asked for cooperation from Apple Inc., Sharp Corp.

, which became a unit of the Taiwanese firm last year, and Softbank Group Corp.

Chairman and Chief Executive Officer Masayoshi Son, who is close to Hon Hai Chairman Terry Gou. In the first round of bidding, Hon Hai put forward the highest bid, easily exceeding 2 trillion yen, informed sources said. U.S. chipmaker Broadcom Ltd. and South Korea's SK Hynix Inc. are also preparing for the second-round bidding. Western Digital is poised to reject the sale of the Toshiba unit to any other bidder, based on its existing memory business partnership contract with Toshiba. Meanwhile, if Western Digital joins the Japanese-U.S. consortium and the team wins the race, antitrust screenings on the acquisition could be prolonged, jeopardizing Toshiba's plan to complete the planned sale by the March 2018 end of fiscal 2017, analysts said.Copyright JIJI PRESS LTD.