Western Digital's acquisition of Kioxia from Bain Capital and Toshiba, forming a huge maker of 3D NAND memory may be getting closer. It seems that major Japanese banks are gearing up to offer a loan of ¥2 trillion ($14 billion) to the American company, according to a Bloomberg report. This move can be considered as a significant step towards the merger, which has experienced several setbacks.
Three Japanese banks — Sumitomo Mitsui Financial Group, Mizuho Financial Group, and Mitsubishi UFJ Financial Group — are at the forefront of this financing initiative. They are set to present a commitment letter in October. Of the total loan amount, ¥400 billion is expected to be sourced through loan commitments. The lion's share of the loan, ¥1.3 trillion, will be divided equally among these three banks, while the Development Bank of Japan will contribute the remaining ¥300 billion.
However, the merger is not without its challenges. The discussions, initially targeted for conclusion in August, have been prolonged due to intricate details. There's a looming uncertainty about the merger's finalization, with concerns that it might either be postponed further or not materialize at all. If the latter occurs, the banks have indicated they will not proceed with the discussed loan. Adding to the complexity of the merger talks is Toshiba's impending buyout.
