Reuters has the article Toshiba to sell chip unit to Bain Capital-led group for $18 billion.
Japan’s Toshiba Corp agreed on Wednesday to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital LP, a key step in keeping the struggling Japanese conglomerate listed on the Tokyo exchange.
A statement later on in the article is what really raised my concern.
Also, the semiconductor business requires huge amounts of investment, and Toshiba’s chip unit risks losing its competitive ability as rivals such as Samsung Electronics roll out big capital spending plans.
It seems to me that Bain Capital has a habit of stripping the resources from companies that it buys, puts the companies into huge debt, then walsk away with the money, and leaves the remnants to the bankruptcy courts.
Since the semiconductor business requires huge amounts of investment, this approach is sure to kill off Toshiba Semiconductor. Of course, I have no crystal ball, and I am no expert. Of course, Toshiba’s weak financial position might have doomed the semiconductor division even if Toshiba had tried to hang on to it.