April 19, 2024

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[THE INVESTOR] Lotte Group Chairman Shin Dong-bin who has a strong network in Japan has become a white knight for SK hynix’s successful bid to acquire stake in Toshiba’s chip business, Asia Business Daily reported on June 22.

Cash-strapped Toshiba on June 21 announced a multinational consortium led by US private equity firm Bain Capital and Development Bank of Japan as a preferred bidder to acquire its chip business unit. SK hynix is offering loans worth 3 trillion won (US$2.6 billion), about 15 percent of the total buying price estimated at about 20 trillion won. 

Lotte Group Chairman Shin Dong-bin

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Toshiba picks Japan-US-Korea consortium as preferred bidder for chip business


Throughout the whole deal process, the Korean chipmaker maintained a low profile to soothe Japan’s concerns on tech leaks to a rival firm. The report said the Lotte chief, among others, played a key role in reversing the hostile sentiment.

According to the report, SK Group Chairman Chey Tae-won met Shin at a Seoul restaurant in late April right after his meeting with Toshiba’s top brass in Tokyo, during which he sought support to persuade Japanese partners.

“Until April, Japan was skeptical about SK hynix joining the Toshiba bid but the situation turned around after Shin arranged several meetings for Chey with Japanese government and political figures,” an unnamed source was quoted as saying in the report.

“Chey’s strong willingness and Shin’s white knight role were decisive in SK hynix winning the seemingly unlikely deal,” the source said.

Shin’s father and Lotte founder Shin Kyuk-ho started his chewing gum business in postwar Japan and married a Japanese wife to have the son. Then he returned to Korea to build the nation's largest retail giant.

The junior Shin, whose Japanese name is Akio Shigemitsu, took office as chairman in 2011. Even though most of Lotte's businesses are now based in Korea, he has maintained close ties with Japanese business and political leaders.

SK hynix, the world’s No. 2 DRAM maker, has been eyeing Toshiba’s NAND business as the demand is soaring for long-term data storage for Internet of Things and big data services. Industry watchers say a 15 percent stake would allow it limited access to Toshiba’s advanced chip manufacturing technology but the firm will secure a foothold to further expand its presence in the burgeoning market.

Japanese media said Bain Capital and SK hynix who joined the consortium at the last minute would secure a combined 33.4 percent stake that may allow them veto rights, not management control, in key business decisions.

Toshiba and the consortium plan to complete more detailed talks before a shareholders meeting on June 28.

By Lee Ji-yoon (jylee@heraldcorp.com)