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Foxconn planning $27b bid for Toshiba's chip business: Report | Updated: 2017-04-12 08:17

Foxconn planning $27b bid for Toshiba's chip business: Report

Terry Gou, chairman of Foxconn Technology Group. [Photo/Agencies]

Foxconn Technology Group is reportedly planning to bid up to $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 $1.5 billion and $2 billion, and those familiar with the matter say that the second-highest bidder offered in the region of $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 ($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 writedowns 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 without the approval of an auditor has yet to be accepted by regulators or the Tokyo bourse and could see the Tokyo-based firm delisted.

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