Foxconn planning US$27bn bid for Toshiba's chip business: Report
By China Daily News Desk
13 April 2017

BEIJING (China Daily/ANN News Desk) - Foxconn Technology Group will reportedly bid US$27 billion to aquire Toshiba's chip unit, as Japanese tech firm faces more woes.  

Foxconn Technology Group is reportedly planning to bid up to US$27 billion to acquire Toshiba's chip business, according to Bloomberg.

It's yet another major acquisition swoop on a Japanese high-tech firm by Foxconn which earlier bid for taking over the electronics firm Sharp.

Analysts estimate that a reasonable valuation of Toshiba's chip business is between US$1.5 billion and US$2 billion, and those familiar with the matter say that the second-highest bidder offered in the region of US$2 trillion at the end of March, according to a Bloomberg report.

The world's largest contract electronics manufacturer is apparently willing to bid high as it currently does not own any large memory manufacturer, and Toshiba's chip business would support Foxconn as it develops memory as a 'cash-cow' for use in a variety of networking equipment, such as Apple products.

Toshiba, the second largest chip producer is keen to sell all of its chip business, as it looks for cash to survive a substantial overrun of a US nuclear power plant project.

At the end of March, the multinational corporation approved a Chapter 11 bankruptcy filing in the United States by its embattled Westinghouse Electric unit with the conglomerate saying it faced a possible 712.5 billion yen (US$6.5 billion) writedown on its failing nuclear energy business and a related group net loss of more than 1 trillion yen.

On Tuesday, Toshiba reported a group net loss of 552.41 billion yen due to losses related to hefty write-downs incurred by the nuclear power plant.

On sales of 576.28 billion yen, Toshiba posted a group operating loss of 3.85 trillion yen during the April-December period.

The filing Tuesday  was made without the approval of an auditor has yet to be accepted by regulators or the Tokyo stock exchange and could see the Tokyo-based firm delisted.

The Yomiuri Shimbun said it was an “extremely unusual move” for a company to not seek the approval of regulations. 

Toshiba has been listed as “securities on alert” since September 2015, according to the newspaper, due to “inappropriate accounting practices.” 

The Tokyo bourse is investigating whether it still deserves this designation. The filing is expected to have an impact on its decision. 

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