Toshiba Picks Preferred Bidder for Microchip Business

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Toshiba said on Wednesday that a consortium made up of the Innovation Network Corporation of Japan, Bain Capital and the Development Bank of Japan had “presented the best proposal.” Credit Toru Yamanaka/Agence France-Presse — Getty Images

HONG KONG — As Toshiba, the embattled technology giant, battles for survival, it has turned to a group led by the Japanese government to buy its prized microchip business, although its plans still face a legal challenge by an American business partner.

After weeks of jockeying among suitors, Toshiba said that it hoped to reach a formal sale agreement over its semiconductor business by next Wednesday, in the process raising much-needed cash. The company did not disclose terms of the potential deal, but analysts have estimated the value of the memory chip unit at about $20 billion.

Such a deal would significantly bolster the fortunes of a titan of the Japanese economy at one of the lowest moments in its century-long history. Steep losses in its American nuclear power division, Westinghouse Electric, have cast “substantial uncertainty” over the company’s ability to function as a going concern, it says.

By picking the Japanese consortium — its members include the Innovation Network Corporation, a state-backed investment fund, as well as the American buyout firm Bain Capital and the Development Bank of Japan — Toshiba is hoping to conclude a sale quickly. The company is hoping to reach a deal ahead of its annual shareholder meeting

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