SK on edge about delayed antitrust regulatory approval from China on Toshiba deal
[THE INVESTOR] South Korean conglomerate SK Group is on edge over its awaited antitrust regulatory approval from China on the sale of Toshiba’s chip unit, as the decision is likely to be put off for several months, according to the industry on March 13.
Multiple sources in the industry told The Korea Herald that SK Group’s key executives are conducting business with high awareness of the importance of getting approval from the Chinese antitrust agency for the Toshiba deal in which the Korean group has a significant stake.
SK hynix, the group’s chipmaking affiliate, is part of a multinational consortium that won the deal last year, led by US private equity firm Bain Capital.
SK Telecom CEO Park Jung-ho, a close aide to SK Group Chairman Chey Tae-won, spearheaded the group’s participation in the deal.
“SKT CEO Park, who led the Toshiba deal, would be tense about the possible delay in completing the deal,” said an industrial insider. “Although there is no direct correlation between the businesses run by the telecom and chip units, Park is a board member of SK hynix. So, he must be concerned about the issue.”
As reported by some in the foreign media, the initial deadline for completion of the Toshiba deal is expected to be delayed from March to as late as June.
Last month, Park told The Korea Herald that Huawei is a “cause of concern,” hinting that the mobile carrier’s business with the Chinese network equipment provider could not be run separately from the chipmaker’s big bet on Toshiba that sparked a fierce competition against Chinese rivals.
SKT is considering buying equipment for the fifth-generation network from Huawei and other global vendors. It is scheduled to select more than one vendor around June.
“The delay seems intentional, because China wanted to take over Toshiba,” a source said. “And considering China’s unique national sentiment, SKT should be very careful in forming favorable ties with Chinese business partners.”
Regarding the impact of the postponed completion of the Toshiba deal, officials at SK hynix and SK Telecom both declined to comment.
According to Reuters, Toshiba is in no rush to finalize the deal since it received injections of capital late last year from overseas investors. If it does not complete the deal this month, it has the option of walking away, the report said.
By Song Su-hyun/The Korea Herald (email@example.com)