The syndicate, which includes the state-backed Innovation Network Corp. of Japan, the Development Bank of Japan, South Korean chipmaker SK Hynix Inc. and four US tech firms, will pay around 2.4 trillion yen (21.52 billion USA dollars) for Toshiba Memory Corp. Bain later said it was working with a "broad list of strategic partners" including Apple, Dell, Kingston and Seagate. It is said to be worth $22 billion.
The consortium, led by Bain, was outlined as the preferential bidder earlier this year, but delays from lawsuits, government and corporate decisions had led to the delay of the sale.
The arrangement was ultimately preferred to bids by KKR & Co. and two state-backed Japanese entities. Only last week, Western Digital looked in poll position to tie up a deal, with reports coming out of Japan that the deal was in the final stages.
Amid ongoing financial woes, the embattled Japanese company has been seeking to sell off its prized memory chip business to one of three groups of bidders. However that deal appears to have broken down as Western Digital failed to agree on limits to its future stake in the chip business demanded by Toshiba. The seller has sued Western Digital for $1 billion for its interference, and the battle is yet unresolved.
As part of Wednesday's agreement, Bain agreed to complete a deal regardless of the legal challenges.
Western Digital also reiterated that it expected to win its arbitration against Toshiba at the International Chamber of Commerce. Bain may be American, but the group it leads includes Japanese companies. The special goal entity making the acquisition will be called Pangea and receive about 600 billion yen in loans, the person said.
Toshiba's board agreed to the Bain proposal at a meeting Wednesday.
The auction has gone through dizzying twists and turns.