“KKR & Co. is trying to persuade Apple Inc. to switch sides and join the private equity firm in a bid for Toshiba Corp.’s flash memory chip business, according to a person familiar with the discussions,” Alex Sherman and Ian King report for Bloomberg. “The pitch comes just days after the Japanese company said its board agreed to sell the unit to another group, led by Bain Capital, that included the iPhone maker, Dell Inc., SK Hynix Inc. and Seagate Technology Plc for for 2 trillion yen ($18 billion). Apple has yet to agree to final terms with Bain and is negotiating the volume of chips to be supplied, another person familiar with the matter has said.”
“Switching to the KKR group from the Bain group would require Apple to become more comfortable with Western Digital Corp.’s role in its manufacturing joint venture partnership with Toshiba after the acquisition and that may still prove a sticking point, said the person, who asked not to be identified because the matter is private,” Sherman and King report. “Apple previously opposed a bid by KKR and Western Digital for the Toshiba unit in part because it would concentrate power within the chip industry.”
“Apple, as the largest consumer of the type of chips that Toshiba produces, is aiming to get the best deal on price and volume for a key component and has a vested interest in keeping the market competitive,” Sherman and King report. “The compact chips are essential for its iPhones and iPods.”
Read more in the full article here.
MacDailyNews Take: Stop the presses! The Toshiba saga is back for an encore!
SEE ALSO:
Bain Capital-Apple group to buy Toshiba chip business for $18 billion – September 21, 2017
Toshiba decides on Bain Capital-Apple Group in chip business sale – September 20, 2017
If Bain Capital bid for Toshiba succeeds, it could be Apple’s largest deal ever – September 14, 2017
Apple mounts a full-court press for Toshiba’s chip business, waging battle with Western Digital – September 8, 2017
Foxconn details plan to acquire Toshiba chips unit; Apple would own 20 percent – September 7, 2017
Bain Capital brings in Apple for last-minute $18 billion bid for Toshiba chip unit – August 30, 2017
Apple and Amazon to back Foxconn on Toshiba chip bid, Hon Hai Chairman Terry Gou says – June 5, 2017
Apple may bid for big stake in Toshiba – April 17, 2017
U.S. suitors get major advantage as Japan to vet bidders in Toshiba chip sale over national security risks – March 10, 2017
“Apple previously opposed a bid by KKR and Western Digital for the Toshiba unit in part because it would concentrate power within the chip industry.”
“Apple […] has a vested interest in keeping the market competitive”
Sounds to me like KKR and WD’s wooing of Apple is a 100% non-starter. Apple knows full well the dangers it suffers from manufacturing power being concentrated into one conglomerate (e.g. experiences with Samsung).
I have nothing to say about whether Apple is right or wrong about holding up the deal. I can only hope Apple gets what it needs and completes the deal as soon as possible. How is it that Amazon can make acquisition deals all the time and things always seem to turn out in their favor leading to an ever higher stock value? For Apple, things never seem to go smoothly and even when completed the share price can still fall. I’m guessing Amazon investors simply have more confidence in Jeff Bezos than Apple investors have confidence in Tim Cook.
Apple needs to have a constant and reliable supply of memory chips even if iPhone sales are supposedly declining so I hope they cut a worthwhile deal.