Foxconn Details Plan to Buy Toshiba Arm With Apple and SoftBank
Foxconn is pressing its case to acquire Toshiba’s memory chips unit, as the Japanese conglomerate struggles to complete the sale, according to Bloomberg.
Foxconn has broad support for its offer from Apple, SoftBank and Sharp and is ready to proceed right away, said Louis Woo, a spokesman for the company. He declined to specify how much Foxconn is offering for the business, but people familiar with the matter have previously said it is bidding more than the two rival groups.
“The bid speaks for itself. It is deal certainty,” said Woo. “What this customer consortium means is that it will provide steady funds to Toshiba to advance their R&D. At the same time, it’s a guarantee there will be more customers lining up to buy their products when they increase their capacity or have better products.”
Toshiba is still negotiating with three groups in the auction of its most valuable business, after failing to secure a final deal with the preferred bidder it selected in June. The effort has been hampered by political opposition and litigation from partner Western Digital. Japanese government officials have opposed selling the chips unit to Foxconn because of its close ties to China.
Woo detailed the proposed ownership to make the case it is not a Chinese or even Taiwanese bid. Foxconn would hold 25 percent of the equity, Apple 20 percent, Kingston 20 percent, Sharp 15 percent, SoftBank 10 percent and Toshiba would keep 10 percent, he said. "We just hope the board directors of Toshiba will make decision on commercial terms, on business terms, on technology terms, rather than political terms," Woo said.
He also made the case that Toshiba is risking its future by delaying. Besides the risk of delisting, he said Toshiba’s chips business will fall behind if it can’t make investments quickly. He specifically pointed to Samsung’s announcement last month that it will invest $7 billion on a new fabrication facility in Xi’an, China, as a warning shot for Toshiba.