Toshiba Corp announced on Thursday that Chinese regulators have approved its sale of its chip unit to a consortium led by U.S. private equity firm Bain Capital for $18 billion. China was the last country to approve of the deal, highlighting its tensions with the U.S.
Boston-based Bain Capital specializes in private equity, venture capital and credit products. Bain’s consortium includes Apple Inc. (NASDAQ: AAPL), Dell Technologies, Seagate Technology (NASDAQ: STX) and South Korean chipmaker SK Hynix. Now, the consortium adds on Toshiba Memory Corporation after winning a battle for the unit last year.
SK Hynix says Toshiba will still maintain a minority stake with the segment.
“The Bain Capital-led consortium has committed to make significant capital investments to help develop and grow semiconductor technology.” said Bain in a statement. “This consortium of companies brings together leading industry players who will invest significant resources and work together to help ensure the semiconductor industry remains highly competitive and can respond to fast-changing demands.”
The acquisition shines light on to Qualcomm’s (NASDAQ: QCOM) bid for NXP Semiconductors (NASDAQ: NXPI). Qualcomm is awaiting Chinese regulators approval to move forward with its transaction, although there has been no recent signs of progression. China’s approval of Toshiba’s sale to Bain Capital could give a hopeful sign for Qualcomm.
Toshiba said in a statement that it expects the deal to finish by June 1, 2018.
NXP shares rose by 4.0 percent, while Qualcomm shares rose by 1.51 percent on Friday.
Qualcomm raised its bid for NXP back in late February, while at the same time Broadcom (NASDAQ:AVGO) was pursuing a takeover attempt. U.S. President Donald Trump eventually blocked the acquisition over national security concerns.
The Committee on Foreign Investments in the United State (CFIUS) had already been investigating the deal, but opposed the merger. Sources familiar with the matter said that Qualcomm does sensitive work for the U.S, government, which concerned officials, saying that Broadcom could potentially weaken the U.S.’s race to 5G technology.
Qualcomm already had doubts of the acquisition when Broadcom kept repeatedly changing the offer due to security concerns, citing the fact that many Chinese acquisitions were already blocked by the U.S.