The business, Toshiba Memory Corporation, is an important manufacturer of flash memory chips, which are used in millions of smartphones and other digital devices.
Toshiba needs money from the sale to repair its tattered finances. A gaping hole in its balance sheet caused by bad bets on American nuclear power projects has threatened the future of the technology company, one of Japan’s biggest and most storied.
The deal’s more convoluted elements appeared to stem from Toshiba’s desire to retain a significant degree of control over the chip business.
One way that will happen is that Toshiba said it would join Bain and its partners in creating the special purpose company that will buy the unit. In effect, that means it will keep a portion of the unit for itself, though it did not say how much. Many analysts expect it to be a minority stake.
The shareholding structure could give Toshiba even more control, however.
Toshiba said buyers would receive a mix of regular shares, preferred shares — which normally do not carry voting rights — and bonds that could eventually be converted into shares. Depending on how the various securities are distributed, Toshiba is likely to end up with a decisive say in the way the business is run, though its partners would take a sizable share of the profits.
There are other obstacles to the deal.
A Toshiba business partner, the American storage company Western Digital, has been pursuing legal action against the sale. Western Digital contends that Toshiba cannot sell the chip business without its approval because the companies share ownership of a flash memory production operation in Japan.
Western Digital was itself bidding to invest in the microchip unit, whose assets include the joint venture. The complexities of the relationship had thrown a wrench into the sale process. Western Digital did not immediately respond to a request for comment on Wednesday.
Foxconn, an electronics manufacturer based in Taiwan that has extensive operations in mainland China, was also vying to invest in the Toshiba chip business. Though people close to the talks have said that Foxconn was offering plenty of cash, Japanese officials worried that selling to the Taiwan group might hasten a transfer of Japanese technology to China.
Toshiba pioneered NAND flash memory and remains a powerhouse in that sector, but rivals have eroded its market share. Toshiba is the second-biggest NAND producer by volume,…