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Toshiba NAND business sale: Suitable sale is becoming increasingly difficult to achieve

A major problem Toshiba has with the sale of the NAND business is the company as a whole is in such a bad financial condition, potential buyers are in a very strong negotiating position. Toshiba has already sold off other profitable parts of the business in order to cover costs resulting from an accounting scandal in which profits were overstated. Now the second largest NAND business in the world is up for sale, prospective buyers are aware that the Japanese technology giant desperately needs a deal, and soon. Downward pressure on the price complicates matters because there are wider considerations beyond the future of the company to deal with.

Political matters are a problem regarding finding a buyer. The Japanese government is keen on either keeping the business in Japan or ensuring a rival regional economy does not gain access to valuable intellectual property and a highly valued business. Problematically, the most valuable offers for the business come from within Asia; the best offer, from Foxconn, is said to be undesirable due to concerns about technology moving to China. Given any deal would be scrutinized for the likely impact on national security, and the government is under pressure to keep business in Japan, selling the NAND business at the valued price has become dangerously complex for a swift solution to occur.

Hopes of selling the business quickly and injecting large amounts of money into Toshiba to allow the company to continue threaten to be hampered by a dispute involving business partner Western Digital Corporation. Western Digital claim Toshiba breached terms when the company began the process of selling the NAND business. Now underway, the arbitration process will use up precious time Toshiba needs to complete the sale before the company is delisted from the Tokyo Stock Exchange. Matters are made worse by the unsuitability of the potential buyers compared to what creditors, Toshiba and the government desire. The problems of achieving such a deal are such that selling the NAND business is now harder than most ever anticipated it could be.