In a recent development, Bain Capital is reportedly in discussions with SK Hynix to revive negotiations for the merger of memory chip manufacturers Western Digital and Japan's Kioxia Holdings. Sources, as reported by Kyodo newswire on Saturday, stated that the talks are underway but did not disclose their identities.
SK Hynix, a South Korean chip maker, stands as a competitor to both Western Digital and Kioxia, and it also holds an investment in Kioxia. The merger discussions, which have been ongoing since 2021 with intermittent pauses, faced a significant setback in October when SK Hynix opposed the deal. Their objection was rooted in concerns about the potential impact on the value of their 2018 investment in Kioxia, a deal facilitated by a Bain-led consortium that acquired the Japanese firm from Toshiba Corp.
SK Hynix's 395 billion yen ($2.67 billion) investment in Kioxia included bonds convertible into an equity stake of up to 15%. The approval of SK Hynix is considered a crucial precondition for the merger to proceed.
As these talks resume, the dynamics of the semiconductor industry are poised for potential transformation, pending the outcomes of negotiations and the resolution of concerns raised by SK Hynix.
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