Apple Inc. (NASDAQ:AAPL) is playing a key role in the consortium of firms bidding for the acquisition of Toshiba’s memory business with the iPhone maker contemplating a contribution of $3 billion.
The company is currently in negotiations regarding its plan to contribute $3 billion towards the funds that the consortium is presenting as its bid for the Toshiba unit. The significant figure adds to the contribution made by other companies in the syndicate including Seagate Technology PLC (NASDAQ:STX), Dell Inc. (NASDAQ:DELL), Bain Capital and SK Hynix among others. The company was initially reported to be participating in the consortium in August but it was not clear until now how much Apple planned to contribute.
It is easy to see why the iPhone maker is interested in the acquisition of the Toshiba memory business. The firm sources its flash memory for iPods and iPhones from Toshiba. Bloomberg reported that having a stake in the Toshiba flash memory business made sense for Apple because it would boost the reliability of supplies. It will also reduce the company’s reliance onsupply from rival company Samsung Electronics. A stake in the acquisition also means the tech giant will be in a better negotiating position when it comes to prices.
“The Cupertino, California-based company is helping swing the deal away from Western Digital Corp,” wrote Bloomberg.
Western Digital Corp (NASDAQ:WDC) is one of Apple’s suppliers and it has also been bidding for the Toshiba memory unit. If it was to secure the deal, Western Digital would have an upper hand over Apple in terms of prices and Apple would not have as much negotiating power.
Apple’s contribution to the consortium’s bid is also quite significant because the company takes the position left by the Development Bank of Japan and state-backed Innovation Network Corp. They decided to pull out of the consortium following the emergence of a lawsuit filed against Toshiba by Western Digital.
Toshiba has been trying to sell the memory business for months as part of its plan to recover from huge losses that it made in the U.S nuclear business.
Apple stock closed the latest trading session on Wednesday at $158.28.
