SK Hynix Investment Vehicle Becomes Largest Shareholder in Japan's Kioxia

SK Hynix's investment vehicle has emerged as the largest shareholder in the Japanese memory chip manufacturer Kioxia, formerly Toshiba Memory. This shift occurred after Toshiba, the previous majority stakeholder, divested its shares in the company.

According to Kioxia's filings on August 11, BCPE Pangea Cayman 2, an investment firm established by Bain Capital, held 77.4 million shares, or 14.19% of Kioxia, as of August 3. This positions the special purpose company (SPC) as the largest shareholder, surpassing Toshiba's stake, which decreased to 77.038 million shares (14.12%) following its recent share sales.

SK Hynix has a history with Kioxia, having participated in the acquisition of Toshiba's memory chip business in 2018. The South Korean semiconductor giant formed a consortium with U.S. private equity firm Bain Capital and other partners. SK Hynix invested a total of 395 billion yen (approximately $3.6 billion at the time) by contributing 266 billion yen to an SPC and acquiring 129 billion yen in convertible bonds for management control. Toshiba Memory officially changed its name to Kioxia in October 2019.

Despite the change in largest shareholder, SK Hynix cannot immediately exercise management control over Kioxia. The shares are held by the SPC, and SK Hynix currently possesses convertible bonds. The company must convert these bonds into shares to gain voting rights and participate in Kioxia's management decisions.