Toshiba sells flash chip business to a global consortium that includes Apple

Toshiba is the world’s second-biggest producer of flash chips and now the company has sold that lucrative business to Bain Capital LLC , an international consortium that includes Apple and in which Japanese firms hold more than a 50 percent interest.

Bloomberg reported earlier this week that Apple, which buys flash memory chips from Toshiba and other suppliers, agreed to be part of Bain’s consortium of partners that includes a few other companies like Dell, SK Hynix, Seagate and Kingston Technology.

The signing was delayed because consortium member Apple “demanded new terms on chip supply,” said Reuters. The deal is valued at $18 billion and subject to regulatory approval.

If approved, the money from the sale should help Toshiba avoid delisting after Westinghouse Electric, its US nuclear unit, filed for Chapter 11 bankruptcy protection. The agreement followed a tortuous auction process that included many potential bidders.

The Wall Street Journal added that a discord between group members emerged immediately.

An an inauspicious sign, a Tokyo news conference on the deal was cancelled, with Bain saying the consortium could not form a consensus on whether to brief media—underscoring fears that the eight-member group contained too many competing interests for it to work well.

“This consortium has so many members that it is going to be hard to come to consensus and agree on who’s going to take the initiative,” said Hideki Yasuda at Ace Research Institute.

Another major hurdle: Toshiba and Bain are litigating with Western Digital, which jointly operates the memory business with Toshiba.

Rising NAND storage prices have already prompted Apple to hike prices of some iPad Pro models so, hopefully, this deal should help ensure steady supply of flash chips for iOS devices.